Say you want to open a new bank account. Today, you can research which bank offers the highest interest rates, has the best customer service rating, and then sign up online, deposit checks, transfer funds, and check your balance—all from your smartphone. If you need help, you can connect to a person or engage a chatbot from the bank’s app or website. Twenty-four hours a day, seven days a week.
What’s (generally) not required? Going to a bank branch during business hours or filling out paper applications. Technology has transformed the banking industry, mere decades after the first ATMs were installed and online and remote banking has become ubiquitous. Shopping for a home mortgage or car loan has been similarly changed. Consumers can shop for the best rates online, get approved, even close the deal from the convenience of their home or a coffee shop and do this all with the highest level of security.
But what if you need to find a new primary care doctor that not only takes your insurance, but is accepting new patients? Or you need to know the costs ahead of time for surgery for that torn rotator cuff? Or you’ve been diagnosed with cancer and want to find out what is the best treatment?
While technological advances, like MRI machines and DNA sequencing have revolutionized aspects of patient care, healthcare has lagged behind using technology to measure outcomes and streamline processes, unlike the banking or mortgage industries. But that’s changing. The healthcare system of the future must implement technological solutions to better disseminate information, aggregate and analyze data, and cut costs, creating significant opportunities for startups and existing companies to change the industry.
Price and quality transparency are big buzzwords in today’s healthcare market. Though the cost of health insurance has been a part of the public discourse for several months, insurance is just one component of a financially complex web.
Patients often have little understanding about the true cost of health services or drugs, because payers negotiate contracts on behalf of members, but those details are kept secret. The emphasis is on staying “in network” for care—a big problem when shopping around could save thousands, even when paying higher out of network costs.
Patients in the individual healthcare market and those without insurance coverage may find getting a straight answer to the question, “how much does it cost?” is nearly impossible.
Determining which doctors, hospitals, or even drugs have the best quality or outcomes is an even bigger ordeal than calculating cost of care. The federal government has taken the lead on quality measures for hospitals by requiring health centers to measure key variables, like 30-day readmission rates and preventable infection rates. This data is publicly accessible on government websites and high-performing hospitals tout their “Star Rating” in the media.
But those measurements may not reflect how the hospital or doctors perform across the board: a hospital might be great for patients needing orthopedic surgery, but a competitor might be a better choice for someone needing cardiac care. How can patients easily choose the best quality care, when they need it, at a price they can afford?
This scenario is attracting a variety of technology companies to the healthcare market. Some are focusing on providing employers with price and quality data so that they can make better informed decisions for their employees about which healthcare plans to offer. Others focus on giving this information to patients directly. All of them have one thing in common: technological savvy.
Interactive websites and mobile apps, like those available from FAIR Health, are designed to help patients estimate the cost of care in their location and potential reimbursement based on their insurance plan. Patients who are uninsured can use FAIR Health’s tools to calculate the full market price of services.
Amino Health is another company focused on bringing price transparency to consumers and self-insured employers. Patients can find doctors using Amino’s search tool and see costs based on their insurance coverage and health condition. Healthcare Bluebook offers its pricing data to consumers, on everything from hearing aids to hospitals.
Insurers are paying attention to the impact of rising healthcare costs and desire for quality on their members and are starting to offer tools that address those needs.
Aetna’s WellMatch price comparison tool gives employees of subscribed employers a look at what a visit to the doctor will cost them after reimbursement. Other insurers offer similar tools for their members.
A growing option for many is something referred to as “concierge medicine.” Once considered an option only for the wealthy, concierge medical practices are growing in popularity as demand for price and quality information grows. Doctors in these types of practice charge patients yearly or monthly fees which entitle patients to primary care services, annual exams, and some diagnostics or lab testing. Some concierge medical practices offer their members additional wellness activities like yoga or products like supplements or even fitness trackers, to help keep their patients healthy.
San Francisco-area BlueWave Medicine is one of the growing number of concierge practices with these diverse offerings.
Getting patients used to thinking about healthcare costs and the quality of the services they are provided will take time. For too long, patients have been unable to get these data. Health systems and providers had little incentive to let patients take a peek behind the curtain, confident that patients (or their insurers) would pay regardless of the price and would put up with substandard service.
Those days are gone and patients are beginning to demand transparency into opaque healthcare pricing as they are increasingly bearing the burden of healthcare costs through high deductible insurance plans. Companies that make price and quality data available will thrive in this new transparent landscape.
By Harry Glorikian, M.B.A.
General Partner, New Ventures Funds
Harry is currently a General Partner at New Ventures Funds (NV). Before joining NV Funds, he served as an Entrepreneur In Residence to GE Ventures –New Business Creation Group. He currently serves on the board of GeneNews Ltd. He also serves on the advisory board of Evidation Health (a digital health startup launched with support from GE Ventures), and several other companies. He is also a co-founder and an advisory board member of DrawBridge Health (a revolutionary diagnostics startup launched with support from GE Ventures). Harry holds an MBA from Boston University and a bachelor’s degree from San Francisco State University. Harry has addressed the NIH, Molecular Medicine Tri-Conference, World Theranostics Congress and other audiences, worldwide. Harry is the author of two related books: Commercializing Novel IVD’s; A Comprehensive Manual for Success and MoneyBall Medicine: Thriving in the New Data-Driven Healthcare Market. He has authored numerous articles, appeared on CBS Evening News and been quoted regularly by Dow Jones, The Boston Globe, Los Angeles Times, London Independent, Medical Device Daily, Science Magazine, Genetic Engineering News and many others.