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Healthcare’s 10 Biggest Business Opportunities

Healthcare’s 10 Biggest Business Opportunities

There are few industries as laden with friction and administrative overhead as U.S. healthcare. We've become the world's poster child

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There are few industries as laden with friction and administrative overhead as U.S. healthcare. We’ve become the world’s poster child for how to make healthcare as expensive as possible; According to a widely cited study in the New England Journal of Medicine, a whopping $1.1 trillion, or thirty percent of every healthcare dollar, is spent on administration. That money is the lubricant that we have to keep pouring into the machine to keep the gears from seizing. If we continue on the current trajectory, healthcare could represent fully half of U.S. GDP by 2050.

As the global population ages, all of the modern problems that undermine healthcare will only be amplified. In my upcoming book, Reimagining Healthcare (Post Hill Press, 2020)I break down the industry by focusing on what I call the Ten Culprits, which, collectively, are what I argue is the biggest challenge that the U.S.– and, for that matter, the rest of the world– has ever faced.

It’s also one of the greatest opportunities for the creation of new businesses and innovations that can help put healthcare on a sustainable path for the 21st century–making it affordable and accessible to everyone. Any entrepreneur would be hard-pressed to read through the list of the Ten Culprits and not come up with at least a few dozen ways to build businesses to address them.

1. The Anonymous Patient 

Despite all the efforts to create medical records that are portable and shareable, there is still no single repository of a patient’s data. As patients move from provider to provider and insurer to insurer, continuity of care suffers as their health history is hidden in myriad siloed systems. Existing systems don’t work because no single entity is managing all of a patient’s data during their lifetime. 

2. Higher Costs Do Not Equal Better Outcomes

Numerous studies have shown that there is no correlation between the cost of healthcare and its outcomes. Try to come up with any other commercial transaction where you can’t weigh costs against outcomes, and you’ll come up blank. It just doesn’t exist because we would never tolerate it anywhere else. 

3. The Episodic Care Conundrum

The disconnected nature of healthcare makes predictive diagnostics and interventions nearly impossible. As a result, we are constantly stuck treating individual symptoms and not the underlying issues. 

4. The Complexity Crisis

A typical primary care doctor has 1,200-1,900 patients. However, according to a New York Times article,  only 27 percent of their time is spent with patients versus nearly 50 percent that’s spent on paperwork. Attempting to coordinate care for that many patients with an ever-increasing paperwork burden is next to impossible.   

5. The Missing Link

No single provider or insurer has all of the data needed to coordinate your healthcare. Neither do you. Having the government step in through Medicare for all or a single payer model isn’t a solution. We need independent trusted entities that manage all of a patient’s data and coordinate its use. This may be the greatest area for new business model innovation.

6. Drifting from the Core

Healthcare providers are spending too much time on the administrative aspects of care, such as documentation, coding, and billing procedures, which detract them from their core competency of caring for the patient. 

7. The Tragedy of the Commons

Everyone involved in the delivery of healthcare is forced to game the system in order to optimize their own success metrics, rather than the patient’s.

8. Defensive Medicine

According to Gallup, 25 percent of all healthcare costs are due to physicians protecting themselves from the potential of malpractice. A 2017 survey of 2,106 physicians reported that 20.6 percent of overall medical care was unnecessary. 

9. The Primary Care Crisis

According to the Association of American Medical Colleges, the U.S. will see a shortage of up to 120,000 physicians by 2030. Primary care physicians are the single most important factor in determining quality healthcare and patient longevity. This undermines the long-term effectiveness of any healthcare model. 

10. The Aging of America

As noted before, an aging demographic will multiply the consequences of the above culprits dramatically over the next two decades, making today’s healthcare models economically unsustainable. 

These Ten Culprits are at the heart of why the U.S healthcare system has become the most expensive in the world. However, they are also present to some degree in virtually every industrial-era healthcare system across the globe, regardless of who the payer is. And, as societies across the globe age, they will start to bring every healthcare system to an economic precipice.

But here’s the good news: there are solutions to each of these Ten Culprits and they represent enormous opportunity for entrepreneurs smart enough to take them on and in the process to build a sustainable U.S. healthcare system that could someday be the envy of the world.

Published on: Feb 13, 2020

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The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.

This article is from Inc.com

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