IT Innovation in Healthcare: Breaking Down the Barriers

Oct. 4, 2016
Munzoor Shaikh, a Chicago-based director in West Monroe Partners’ healthcare practice, discusses three different buckets in healthcare IT innovation—and what needs to happen for providers to partake in them.

In recent years, there have been various areas of amazing advancements in healthcare IT. But, as costs continue to rise and with an aging population and an explosion in chronic disease nationwide, more transformation is needed.  

To this end, as Healthcare Informatics Editor-in-Chief Mark Hagland wrote recently, regarding the Health Affairs estimation that U.S. healthcare spending will rise from $3.3013 trillion in 2014 to $5.631 trillion in 2025, “that figure meets the day-to-day working reality of CIOs, CMIOs, and other healthcare IT leaders, in medical groups, hospitals, and health systems. Because, in order to bend that five-and-a-half-trillion-dollars-plus annual expenditures curve even a little bit, will require a massive investment in, and successful implementation of, excellent health information technology. What’s more, it will require the extreme optimization of healthcare delivery and administration processes, using those IT tools, solutions, and systems. U.S. healthcare can simply no longer afford to be a trillions-of-dollars-a-year ‘mom and pop shop’-type cottage industry.”

Indeed, despite healthcare’s size and growth rate, the sector was long considered an impenetrable, or at least an unattractive, target for IT innovation—but that mindset has shifted. Technology giants such as IBM and Microsoft are more often partnering with providers to improve the healthcare delivery process, while attempting to also bend the cost curve. But, these kinds of partnerships are mostly still in infancy stages.

According to Munzoor Shaikh, a Chicago-based director in West Monroe Partners’ healthcare practice, there are multiple buckets of IT innovation in healthcare, though most providers are still in the very early stages of partaking in them—if they are at all. Shaikh, who has more than 15 years of experience in management and technology consulting, with a primary focus on managed care, health insurance, population health, and wellness, spoke to Healthcare Informatics Managing Editor Rajiv Leventhal about these innovation areas, the sector’s biggest challenges when it comes to technology advancements, and what the future has in store. Below are excerpts of that discussion.

Munzoor Shaikh

The mindset around IT innovation in healthcare seems to be shifting. Can you explain why this might be?

Well, I think there are several areas of innovation in healthcare, and we can start with patient access to care. We are in the midst of a digital transformation, and while the world has gotten digital, healthcare is a ways behind. Innovation is more than just connectivity and computers and networks; a lot of it is around the model in which you engage the consumer. For example, most healthcare payers have historically not really engaged with the member; their customers have been other businesses. So they are going from B2B [business to business] to a B2C [business to consumer], and there is an organizational shift around IT innovation.

The same thing holds true for hospitals and clinics. We were talking with a clinic the other day about how they view a patient’s journey. If you look at a patient’s journey map, what are the pain points and how can technology solve them? Some of them are very basic, like mobile apps, reminders, coordination of care, coordination of data in the back end, and a big theme that came up was the automation and coordination of services for members. There is that patient access side, and there are things like virtual hospitals, if you will, where you have Skype, which can represent a similar experience as if you went to a hospital or clinic.

The other bucket linked to technology is analytics, and it’s not the computing power and predictive capabilities, but more a function of the U.S. healthcare system—and the world’s healthcare—as they are struggling with data aggregation. One of the key things that a population health company can do, and does, is data aggregation around claims, clinical, social demographic, wearables, all of that data. We have this theme internally that we have reached the age of a measured life—everything that can be measured is, but can we put it to good use? That has more to do with data science.

The third bucket is around consumer facing. We always talk about how Amazon is changing their relationship with the customer, and Amazon knows a lot about me, such as what I like to eat, buy and what books I like to read. They are able to cross reference that and tailor it to my preferences. This sounds cool, but it’s more than cool. There’s a real function to it; a concept of population learning.

When you think about population learning, you should consider what patient learning is. So my doctor can look at me clinically and if evidence-based guidelines say that someone in my age group, sex and ethnic group has these particular conditions, and these are the drugs that will work for me for diabetes, that type of evidence-based medicine does work in theory—but not necessarily at the point of care. So that’s half of the equation, and it hasn’t been solved yet at the point of care, but even if it was solved, it’s only half the equation. The other half is the doctor tailoring treatments and procedures for me given my lifestyle. Do I travel? Do I have kids? Patient learning is learning how I respond to this treatment. If I am not doing it, the doctor can also learn more about me and tailor the treatment to that reason.

Now take that one patient and apply it to a population. Doctors are not doing this well with one patient yet, as it’s only happening in a few places. Extending to a population, it gets even worse. You have to learn how a population in northern Illinois behaves differently than southern Illinois, for example. Whatever evidence based medicine suggests, you have to suggest something on top of that to really learn with that population. There are not enough processes and technology tracking things in place yet to be able to create an iterative, agile process where you administer something and observe the results. And I do think this other half of the equation is one that technology and innovation can solve.

What are providers currently doing in these innovation buckets?

I don’t think providers are doing much of these things at all. They are worried about other stuff, about fighting the fee schedule battle with payers. We talked to one provider who has a ton of cash and a ton of opportunity for innovation, and we asked them how come you’re not doing these things? The answer is that they’re saving every single penny so they can buy up the next hospital so they can have bargaining power against the payer. All of the resources are being allocated to that. The forward thinking provider is definitely thinking about these three buckets, though.

What will have to change for providers to be doing more of these things?

It’s a great question, but I don’t know the answer as it’s hard to predict the future. So long as providers are worried about reimbursement, which they will be for a very long time, this will be a challenge. The only exception to this is that some academic medical centers that already have a strong clinical brand might be doing some of these things. I spoke to one recently that said they want to be the best diabetes center ever, so they’re investing money into IT innovation towards that. I also recently spoke to a provider in the Chicago area who said they never have had a chief marketing officer until now, since they never had to market themselves.

Are you seeing more partnerships between technology companies and healthcare providers to spark innovation?

Not at the level that I hoped for. What I would love to see is a provider buying out a technology company that is completely out of their wheelhouse and then looking to be the next Amazon or Google of healthcare. But that innovation, provider-led innovation, is not happening yet.

 What are some predictions for future trends we’ll see in these areas?

My point of view is that while all of these barriers to innovation exist, there is a great opportunity for providers to become masters of their own destiny. Whether they realize it or not, and I think they do, they are not controlling their own destiny right now. They are just reacting against payers, and that’s why they want to [increase] their purchasing power. So there is an opportunity here to say they will be masters of their own domain, do more self-pay, and be more of a retail service provider. “Gain customers, keep customers, and our customers will pay us because we do a superior service.” They may have to only target diabetics who can afford high cost services for better results, rather than target the entire market. “I can tailor my services to you, so try me out for six months and if you don’t like, you can stop.”

Traditionally, payers capitate the payment to the providers, but some providers are doing what I call “micro-capitation,” going to the patient and saying “You give me a flat rate of X amount of dollars, and I will give you gold, silver, or bronze level services for different levels of guaranteed outcomes for your health.” So the patient becomes the payer, which is closer to the Milton Friedman model of economics; the person who buys healthcare also is the one paying for it, and you don’t see that much today.

The opportunity to go direct to the patient has a lot of potential for IT innovation, process innovation, and even clinical innovation. Providers are getting all kinds of data from people like me, and will be able to go to a health plan pretty soon and say that they have some pretty good data and that they can take capitated risk better than everyone else. Providers being in control of their own destiny because they have the opportunity to do something is the highlight.