Cutting the Cords

I've been reading about various ways consumers are starting to "cut the cord" from many traditional sources of services, and I keep wondering: what's the equivalent in health care?

Let's look at some of the trends:

1. Landlines: Mobile phones (increasingly smartphones) are pretty much universal; a year ago Pew said 90% of adults had a mobile phone, and 58% a smartphone. As a result, landlines may be on their way out; already some 46% of U.S. households don't have a one.  Two-thirds of those 25-29 are exclusively mobile.  
2. Mobile carriers:  Mobile carriers have to look at the landline trends with both glee and dread, the latter because they may be next.  Ryan Knutson of The Wall Street Journal recently recapped his attempt to rely solely on Wi-Fi only service, which he deemed "definitely doable." So doable, in fact, that there's already a market.  In January Cablevison announced their low cost Wi-Fi only service, and Comcast has hinted it might not be far behind.  Companies like Republic Wireless are already offering Wi-Fi/cellular hybrids that are priced lower than most wireless carriers, a path that Google just announced they will follow
3. Cable: Streaming may be the new cable for watching TV or movies.  Many predict 2015 is the year that significant numbers of households will start getting rid of cable service in lieu of OTT (over-the-top content) options, which are starting to include such premium content as ESPN, HBO, and Nickelodeon.   Amazon, Dish TV, Hulu, and Netflix are all eager to replace your cable TV service.
4. Taxis: It's likely you've heard of Uber, and if you are under 30 and/or live in a large metropolitan area, you've probably used it instead of a taxi.  Uber claims it is a technology company, not a transportation company, an argument the taxi companies find frustrating in their attempts to equalize regulation.  Amazingly, Uber is already projected to be worth at least $40b and may be soon worth as much as $80b.  In some markets, like its home of San Francisco, it's already bigger than the entire local taxi industry.
5. Hotels: Airbnb is taking the hotel business by storm, doing for it what Uber is doing for taxis.  Airbnb's most recent investment round values them at $20b, and their million rooms is more than any of the traditional hotel chains.  Heck, even Warren Buffet recommends using them.

While Uber and Airbnb avoid investing in their own taxis or hotel rooms, respectively, in health care we're continuing to spend billions to make hospitals nicer, or at least prettier, despite a new study from Johns Hopkins researchers that indicate such new, supposedly patient-centered improvements have little impact on patient satisfaction.  As the study's lead author Zishan Siddiqui, M.D., said: "Hospital leaders will have to stop blaming poor patient satisfaction on aging buildings and units."

Maybe we need an Airbnb for hospitals.

In health care we're also still walking telemedicine just ahead of the sheriff, as the saying goes.  The Texas Medical Board is considering restrictive rules, which telemedicine vendor TelaDoc is fighting in court; new research confirms that state licensing requirements continue to be a burden; the AMA seems more concerned about protecting physicians from liability than in increasing patient options.

Organized medicine is still fighting to avoid cutting that in-person cord.

Roy Smythe, writing in Forbes, warns that health care is going to have to learn to operate differently. He believes health care must embrace "losing potential revenue and being progressively demonetized by technology."  As an example, he quotes Peter Anderson, Chief Strategy Officer for Sutter Health: "lab tests in the future will be home-based, and this will be both more convenient, and much cheaper than the current model"

That's not in the far-off future; Smythe cites Theranos and Diagnostics for All, both of whom are already upending lab testing.  Theranos can perform a full array of tests using just a few drops of blood or other bodily fluids.  DFA has a unique paper-based approach that can be used and interpreted even in the most rural areas, without needing a lab or a trained professional.

It shouldn't be surprising that Theranos is already teaming up with Walgreens to deliver their solution more conveniently to consumers.  Indeed, Tom Greene argues in Venture Beat that retail clinics, such as Walgreens' healthcare clinics or WalMart's primary care clinics, could do to health care what Uber is doing to taxis.  He notes that retailers know a lot more about customer loyalty than most health care organizations, and believes that to succeed health care also "...will have to embrace an Uber-like ecosystem that places a premium on convenience, availability, and access."

That's nice to think about, but I've written before that I worry that new entrants in health care may be more interested in getting their share of its bloated spending than in revamping how the system works for patients.  We really need fresh approaches.

I don't know who the Ubers of health care will be, but when I think about "cutting the cord" in health care there are two cords that I think are going to have to go:

• Third party payments: We've become lulled by the premise that other people -- e.g., health insurance or Medicare -- pay for our health care, and that fantasy has allowed the ridiculous prices and excessive utilization we see in health care.  We do need mechanisms to protect people from truly catastrophic expenses, and to help finance care for low income people, but most health care should be financed directly.  Note to health care innovators: figure out services that provide enough value to consumers that they will pay out of their own pockets for it.
• Practice of medicine regulations:  These exist ostensibly for the protection of patients, and have been part & parcel of health care for so long that we think of them as inviolate.  The fact that they are used, among other things, to prevent patients from doing a video consult with outstanding physicians who happen to live in other states, or even in other countries, illustrates that what they end up doing is protecting the providers who practice nearby.  That is not to say that physicians and other health care professionals don't and won't continue to add value, but we've allowed them to claim that value more on their simply having a license than on any demonstrated results.  That won't work in the 21st century; value may come from non-traditional sources.  Note to health care regulators: let's focus more on actually demonstrating value and less on the type of degree or license the person delivering it has.  

The health care system isn't going to get overturned all at once.  Change is most likely to come first for less complicated conditions and types of care.  And that's OK.  Once consumers see how different health care can be, it's going to be hard to avoid that tidal wave from reaching the rest of the health care system.

Cutting the cord can be scary, but if we do it right it will be liberating.