Retail clinics, telehealth, self-care medical devices, mHealth, and over-the-counter diagnostic testing share one thing in common: they are disruptive to the healthcare industry. Each of these meets emerging needs in a more convenient and cost-effective way than is offered by existing markets.
Despite the disruptive nature of these “DIY Self Care” innovations, most large, integrated delivery systems have failed to properly incorporate them into their own operations. And who can blame them? These emerging markets are a mere $67 billion drop in a $3 trillion U.S. healthcare bucket. Additionally, hospitals and physicians have enough on their plates managing their existing $1.5 trillion market in an environment of reimbursement constraints, unceasing regulatory demands, and a seemingly never-ending list of competing strategic initiatives.
As history has shown in other industries, however, ignoring disruptive innovations almost always leads to disastrous results.
The essence of disruptive innovations is that they meet emerging needs not addressed by existing markets. Up until now, the demand for “cost effectiveness” offered by DIY Self Care took a backseat to other demands because consumers were largely shielded from costs. But this is changing as higher deductible plans become more predominant. Demands for greater convenience are also emerging as consumers embrace mobile technology solutions in almost every facet of their lives.
DIY Self Care will also be disruptive because various innovations have improved the efficacy of products and services to the point where they meet consumers’ minimum quality expectations. In other words, products and services that used to be considered clinically inferior and/or technologically impossible are now becoming “good enough” to the average consumer.
DIY Self Care products and services, if not properly integrated, have the potential to effectively cut out mainstream providers from some of the primary care services they offer today. Every single retail solution that costs less than a $60 copay significantly increases the risk that Americans will simply bypass their insurance and the mainstream healthcare delivery market. As new innovations emerge, this risk will become exponentially greater.
It is imperative that existing healthcare systems identify a strategy for accommodating the collective products and services that make up the emerging “DIY Self Care” market. Alternative payer arrangements, new delivery models, and narrow networks will not provide sufficient protections against these disruptions. Besides, it is in the best interests of integrated organizations to adopt more cost-effective innovations in a risk-based, pay-for-performance environment.
To achieve success, existing healthcare delivery organizations will need a bold and creative strategy. Such a strategy must allow these capabilities to be cultivated outside of their existing operation, but be integrated in a manner that improves the overall patient experience.