Why is There No Discovery Interface in Healthcare?
Alibaba is the world's largest retailer but owns no inventory; Airbnb is the largest accommodation provider but owns no rooms; Uber is the largest taxi company but owns not a single vehicle. Yet, these companies have amassed huge adoption and have grown significantly over the years.
Essentially, these companies provide a discovery interface that connects consumers to the service provider. Their value lies in providing information to empower consumers to make better purchasing decisions. Airbnb does not only provide you with a list of houses but also provides a host of other information about the house and the neighbourhood, which allows the consumer to decide whether the house meets the consumer’s needs and preferences. Alibaba and Uber follow a similar approach.
The most disruptive companies in tech do not make things. They connect and empower consumers to make decisions efficiently. Healthcare, despite its large market size and arguably greater value to customers, has not seen a similar scalable discovery interface. Here’s why?
Balance of power
In most industries, the buyer of the goods or services is the end consumer. The consumers choose the product or service they need and pay for it; therefore, they hold the negotiating power.
Healthcare is consumed differently. Consumers most often do not pay for their care directly. Most healthcare services are paid by insurers, employers or governments in part or full- otherwise known as third-party payers.
This creates an interesting relationship where the patient receives the care, but the doctor's economic incentives are motivated most acutely by the third-party payers.
Therefore, third-party payers are in a unique position to bring a positive change to healthcare. They are in a position to drive adoption of new technologies from both patients and doctors. Any discovery interface in healthcare must go through third-party payers to be successful.
In this type of environment, despite the best of intentions by all ecosystem participants, patient’s interests are often lost in the process.
Patients want a convenient way to find relevant care. They want efficiency, access to information and availability of a real person to guide them through the process. However, the reality is a stark contrast. Even today, patients throughout the world suffer from a serious lack of empowerment. They are often told that healthcare is simply too complex for them to fathom. Really?
Let us compare the purchasing experience in other sectors (i.e., buying a car) to healthcare. Designing a car is really complex but the consumer’s purchase experience is not.
Do we have to understand the drag force formula or instantaneous power equation or other concepts of aerodynamics to judge the performance of a car? No. A newbie consumer can easily refer to horsepower. This acts as a good indicator of performance. To gauge engine efficiency, do we have to understand thermodynamic concepts like viscosity or how turbochargers and aftercoolers work? Again, the answer is no. A consumer can simply rely on mileage as an indicator. Similarly, resale value works as a good indicator of the car’s value over time and purchase price as an indicator of the cost.
Notice how easy it is for a consumer without any knowledge of cars to purchase one? They can easily compare different cars based on verified metrics and purchase one that suits their needs. Compare this scenario to healthcare.
Healthcare remains an opaque industry with almost no relevant and readily available information. The data that is available is not translated into consumer-friendly intermediate markers (i.e., horsepower, mileage or resale value in case of a car). This leaves patients in a stressful and often traumatic environment when they have to find a doctor. They have no relevant information and no qualified person to help them navigate this complex ecosystem.
Patients are forced to make the most important decision of their lives in an information vacuum and hope for the best.
Unfortunately, even in the US, one of the most developed healthcare markets, medical error is the third leading cause of death. Choosing the right doctor can often make the difference between life and death.
This begs the question, is it impossible to build a scalable discovery interface that connects doctors and patients based on verified metrics. No. It hasn’t been done before because consumer demands have been historically muted by third-party payers.
Future of healthcare
Till now, thanks to high profits, third-party payers never had an incentive to get to know their policyholders or respond to their demands. Now, they are being forced to change.
Stiff competition from tech companies and new age direct-to-consumer insurers are cutting into the profit margins of the third-party payers. They have only two choices: innovate or become irrelevant.
In an attempt to stay relevant and continue to prosper, third-party payers are pouring resources to form partnerships with innovative startups. The global insurtech market revenue is valued at $532.7 million in 2018 and forecast to reach $1.1 billion by 2023.
As the insurtech revolution sweeps across Asia, there is now a real potential of a scalable discovery platform emerging in healthcare.
It remains to be seen whether a traditional industry like insurance can make significant changes to their strategy and organizational structure to partner with much smaller companies - companies that are capable of fulfilling the patients’ needs.
Reimagining the discovery of providers goes hand in hand with reimagining health insurance. As daunting a task it is to disrupt a traditional sector like healthcare, it is inevitable that change is coming because the status quo is unacceptable. Once patients are aware that it is possible and learn how to make data-informed decisions in choosing their right doctors - a decision that impacts outcome - then we may meaningfully empower patients and truly transform healthcare.