Big Tech Still Has More to Learn Before It Can Help Fix Our Broken Healthcare System

To the behemoth tech companies, the $3.6 trillion America spends on healthcare looks like a “golden goose.” In need of ways to push their trillion-dollar valuations even higher, the tech giants have been making healthcare bets. Some people believe that Google, Amazon, Apple, and Microsoft are going to do to healthcare what they did to music, movie, retail and other industries. 

Dr. Robert Pearl, the author of, “Why Big Tech Companies Won’t Solve Healthcare’s Biggest Challenges,” explained why these household names won’t be able to disrupt healthcare with new technology alone. Call me a contrarian too. That is, unless the technologists realize what made them successful in the first place.

I recently wrote that technology alone won’t enable us to move to value-based healthcare. People just don’t use, and certainly won’t pay for what doesn’t help them, no matter how slick the product or service is. Before I started swimming, you couldn’t pay me to download a swimming app to improve my performance. Now, someone, please help.

The tech giants became giants based on two simple operating principles. They tapped into big problems people wanted solved; and then they found someone – whether it be the customer or a third party – willing to pay a lot for the solution. But healthcare is a much tougher puzzle to solve. Tech giants haven’t been able to narrow in on the pain point they’re solving for, determine whose pain point it is, or who has the ability or desire to pay for the solution. Healthcare’s confusing set of incentives mask normal behavior and obscure who is really footing the bill – hindering the tech giants’ path to success.   

If they choose to target consumers with new technology solutions, the tech giants will discover what we in healthcare have known a long time – what consumers say they want and what they’re willing to pay for, or act upon, often differs. Consumers want better health, but giving up the fatty foods they love, finding time to exercise, taking medicines that have some side-effects; these are the things that keep them from better health. Technology has a tall task to overcome these intrinsic barriers, and, if the results aren’t visible right away, the consumers stop paying for the services.

The consumer market has another problem. It’s huge, but only a small fraction of the population drives most of the nation’s annual healthcare costs. These high-cost individuals are disproportionately from a social and demographic group without significant economic resources – and often a mistrust and/or comfort gap with technology. Moreover, they typically aren’t the self-motivated FitBit-wearing, Peloton-riding types who are seeking more ways to proactively make behavior modifications. If the tech giants aren’t careful, they’ll target a large market of people who are already healthy and wealthy and ignore the “less attractive” market that incurs most of the healthcare costs, which is where we need to move the needle.

If tech companies choose to target doctors and hospitals, then they are barking up the wrong healthcare tree. Fee-for-service is still the dominant payment model for doctors and hospitals, meaning they are no more in the market for health-improvement technology than I was in the market for the swimming app before I jumped in the pool. So, scary as it may be, technology may drive up healthcare costs if they listen to what doctors and hospitals say they want today. When we eventually pivot fully to value-based payment models, technology companies could thrive by helping healthcare be better and cheaper.

If tech companies choose to target insurers, then they are getting awfully far away from the point of care. Sort of like delivering new technology to car insurance companies for the purpose making cars run better. At ChenMed, we believe that much of the $3.6 trillion cost problem is about lack of health caused by social determinants and poor lifestyle choices. A payor has only peripheral influence over these things.

At ChenMed, we love technology and pride ourselves on having one of the best tech teams of any medical group in the United States. I am also not opposed to disruptors entering healthcare. God knows we need to break the status quo. We have the most expensive system on the planet, frustrated patients and doctors, and we lag most other nations in health outcomes. I know we can’t stop the tech companies from entering healthcare, but the disruption should start from within. Let’s change what we expect of a primary care doctor and put them in the driver’s seat to “quarterback” care. Let’s train existing health providers to manage health holistically rather than be solely diagnosticians and prescribers. Let’s call out where profit motive, affordability, and patient well-being don’t align and change payment structures to align them. And, someone, please build me a good app to conquer my swimming technique.