Into the 3rd Quarter of Healthcare: Doctors and Patients as a Commodity

The changing macro environment of healthcare

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When you hear the word commodity, what comes to mind?? Maybe tradeable goods like gold, corn, wheat or oil.? In the era of tech, maybe it is data that can be used to develop new consumer products or used for marketing.? Chances are, your health is probably not something you think of as a commodity.? While a heart attack, the birth of a child, and the chemotherapy you received for colon cancer may be deeply personal to you, they can be de-identified and used to create new algorithms, digital products, and artificial intelligence (AI) tools.? There is a new ecosystem being built with large tech companies, healthcare companies, and startups to use patient data for both research and to develop new products to sell on the open market.? This ecosystem includes health record companies like Epic and Cerner, health services providers like Optum, and a growing number of healthcare systems like the Massachusetts Institute of Technology (MIT), Mayo Clinic, and Stanford.? In fact, the new trend for many university and large medical centers is to have incubators to attract investments from startups, venture capital, and large tech companies.? Your healthcare data is de-identified, stored in large data lakes in places like Amazon Web Services (AWS), and becomes the raw materials to sell as a commoditized resource.?

In the new age of healthcare, AI and advanced analytics will analyze your longitudinal data.? Ultimately, healthcare will incrementally mirror social networking and ecommerce where data is used to drive new products, efficiency, advertisements and profits for select companies while you become the product.? This will have significant implications for health insurance companies to maintain profits, clinical trial enrollment for drugs, and selective messaging between your doctors’ visits.?

Currently, healthcare is a $4.5 trillion market, making up approximately 17.3% of the gross domestic product (GDP) and rising of approximately 4.8% per year.? Yet, approximately 25% of healthcare spending is wasteful.? Furthermore, the average hospital generates 50 petabytes of data a year, of which 97% of it is completely unused.? If we then extrapolate 6,000 hospitals, this equates to 300 exabytes of data.? That’s not including the hundreds of thousands of healthcare clinics, 15,000 nursing homes, and thousands of ancillary services like physical therapy and home care.? Costs are also rising and there’s an estimated labor shortage of hundreds of thousands of doctors and nurses in healthcare.?

While big data and efficiency in healthcare has been prognosticated for quite some time, we haven’t had the confluence of economic pressures that we face today.? We’ve finally crossed the threshold where analytics and AI are inevitable.? Simply put, the target is too big, the system too inefficient, and the costs too high for healthcare NOT to be disrupted.? Data analytics and AI promises to turn the data already collected by doctors and nurses into innovative new products and improve the quality of care.?

We will explore in more detail the scientific advances as well as the economic and political changing landscape in the US healthcare system that are driving these changes.? We’ll also explore both the intermediate and long-horizon changes that will be coming.? Before we dive deeper in the current state of the US healthcare system, it’s also important to understand the history of modern medicine which, for the purposes of this discussion, will be broken up into quarters. The next article will begin with the history of medicine from the 1800s.