How To Build A Disruptive Clinical Workflow, RCM, or Telehealth App That Is Capable of Submitting Medical Services for Reimbursement: PART ONE

Most in this audience know the prequel. The digital health industry, particularly the telehealth subsegment, exploded towards the middle of 2020, after COVID19 entered this world:

Nobody wanted go to a doctor’s office anymore to sit in a waiting room full of sneezes, coughs, and farts – wait, no, I mean sniffles.?Video visits became reimbursable under special regulatory orders, which were then extended into status quo fee schedules. Other digital health subsegments took off like billionaires in rocket ships as well. Per Allied Market Research, “The Global Remote Patient Monitoring Market size was $703 million in 2015 and is expected to grow at a compound annual growth rate (CAGR) of 17.0% to reach $2,130 million by 2022.” Common sense tells us that it is hard to take blood pressure, weight, electrocardiogram, and other readings during a telemedicine appointment without specialized equipment so it makes sense that these types of hardware and software went the way of Bezos and Branson as well. Overall, digital health funding grew at a 28% CAGR from 2011 through 2019 and then spiked to a 65% CAGR from 2019 through 2021.

Meanwhile, “the global application development software market is anticipated to reach USD 733.5 billion by 2028, expanding at a CAGR of 24.3% from 2021 to 2028.” (Grand View Research, 2021). The short of it is that, in the words of Andreeson Horowitz, “Software is eating the world”. We are in the midst of The Great Resignation, partially driven by entrepreneurial developers across the country who are leaving their day jobs to do things like code new digital health programs as freelancers for emerging startups.?

In turn, the healthcare industry, notoriously reliant on fax machines, is being transformed just like the travel industry was in the late 90s and early 2000s. Do you remember when you had to go to each airline’s individual website, opening 6-10 browser windows after dialing into your modem, to manually compare ticket prices??Then, all of a sudden, you could go to one website, like Kayak or Expedia, that aggregated and compared the flight price data across multiple airlines in one singular, consumer-friendly interface with e-commerce capabilities.?Well, that is what is happening today in healthcare…

The tailwinds for the digitization of healthcare were part viral but also were part regulatory: ?

1.?????The 21st Century Cures Act, and its associated Patient Access API, Interoperability, and Information Blocking Rules, forced health IT incumbents to break down their walls gardens. Now, in cases where consumers authorize digital health apps to retrieve and serve up their personal health information through sexy new UX/UI, the legacy tech companies, primarily the core claims admin systems on the payer side and the electronic medical record companies on the provider side, are now required to share the data via Application Programming Interfaces (APIs) or face steep fines.?

2.?????The 2021 Outpatient Prospective Payment System (OPPS) enacted new, increased penalties as of January 1st 2022 for some hospitals. Hospitals now must comply in sharing their charges and negotiated rates for core services with consumers and their IT delegates or they will face fines ranging from $100k to $2m per hospital per year.

3.?????The Transparency in Coverage Rule frees up health insurance pricing information that was previously held behind lock and key. ?The first part of the rule requires a large subset of commercial individual and group insurers to publish beneficiary-level out-of-pocket cost-sharing data and negotiated rates with consumers (or authorized digital health apps of their choosing) on request via a self-service website, rolling out over the course of 2023 and 2024.?The second part of the rule requires the same plans to make the following data sets available to consumers, researchers, employers, and third-party developers in machine-readable format as of Jan 1st, 2022:

• Negotiated rates for in-network providers
• Historical payments to and billed charges from out-of-network providers
• In-network negotiated rates and historical net prices for covered prescriptions by pharmacy location

4.?????CMS’s Blue Button 2.0 allows Medicare Fee-For-Service beneficiaries to access their claims history and delegate access of that data to the digital health apps of their choosing via a Fast Healthcare Interoperability Resource (FHIR)-based claims. According to CMS, “As of December 2020, over 60 organizations have Blue Button apps available and over 2,500 developers are working on development of applications.”

5.?????CMS’s Transformed Medicaid Statistical Information System announced the enrichment and release of the following deidentified Medicaid and CHIP beneficiary data from CY14-18, which will be available to various stakeholders including entrepreneurs and digital health developers:?

• Annual Demographics and Eligibility (DE)
• Inpatient Hospital (IP) Claims
• Long-Term Care (LT) Claims
• Pharmacy (RX) Claims
• Other Services (OT) Claims

Now, what the hell does this all mean??It means that the walled gardens, built by payors, providers, PBMs and their core IT system partners, that previously protected their “proprietary data”, have broken down like the New Orleans levees did in 2005.?There is no more keeping open innovation away.?Massive amounts of previously sheltered healthcare data is now available to entrepreneurs and digital health app developers worldwide (provided the appropriate consents).

If history is any indication, the best-in-class workflow platforms of tomorrow will not be built by the incumbents (the Epics, Cerners, Cognizants, and Conduents of the world).?However, the next gen health tech disrupters will be enabled and empowered by the data that those incumbents collected and are now forcibly providing in open, info-sharing ecosystems “where the data – not beer – [now] flows like wine” (Dumb and Dumber fans?).?The reason is that the best and most cost-effective innovation happens in free markets when those free markets are operating at max efficiency (i.e., markets with data liquidity).?Data is ‘money’ and it took viruses and law to rob the rich and pay the free markets that ‘money’.

Now, does that mean that the incumbents are doomed to fail??I work for Change Healthcare, a publicly traded health IT incumbent with $3b in annual revenues. ?I’ll give you another history lesson about why incumbents will actually benefit from this trend, assuming that they cede front-end application / workflow development to the next generation of great entrepreneurs.?There was nuance in my statement that “the best-in-class workflow platforms of tomorrow will not be built by the incumbents.”?I did not say “the best-in-class back-end and middleware platforms of tomorrow will not be built by the incumbents.” ?Here is the reason why:

One of the greatest examples of innovation in application / user experience in the last decade was Uber, which “borrowed brilliance” through API workflows from several established players (as of Uber’s implementation date for each service), including Google (maps), Stripe (payments), Twilio (communications), and Braintree (payments).?They did this so that they could focus on their limited resources on optimizing their customer experience instead of building geo-location, payments, and communications functionality that already existed in the market (i.e. non-innovative tech).?

Rather than sitting back and watching their market share erode, the incumbents that powered Uber exploded in growth as they monetized their core business process and data by opening pay-by-transaction APIs to the free market, offering access to anyone willing to innovate.?Stripe grew from $0 to $35B pre-money valuation between 2010 – 2019.?Braintree grew from $0 to $800M pre-money valuation from 2007 – 2013.?Twilio grew from $0 to $19B pre-money valuation from 2008 – 2019.?Google has experienced 11x growth in market cap since Uber was founded in 2009.

My opinion is that if Google had looked at their powerful Google Maps assets in 2009 and tried to build/buy/innovate their own transportation disruptor, they would have gotten in their own way while burning through lots of cash, never releasing an Uber type consumer application.?Instead, at least in hindsight, they probably realize that innovation in customer experience for transportation required piecing together a lot of things that they were not leading the market in, which would be very expensive to create, including very specific payments, communications, end-user transportation UX/UI, and sales & marketing core competencies.?In a smart move, Google let the free market innovate the disruptive solution and simply enabled Uber by creating market efficiencies by offering data liquidity as well as new high margin services through the Google Maps API.?

This is why the regulators are forcing those that want to “stay stuck” in the non-connective days of the Intranet to get with the Internet era! ?

This is why the incumbents will not be disrupted if they open their core infrastructure up to open innovation for Next Generation workflow applications!

This is also why my company, Change Healthcare, is focused on accelerating our API roadmap by volition and improving our developer experience through things like clean SDKs and deep/interactive developer communities!?

Our goal at Change Healthcare is to help the next generation of digital health applications innovate, starting by opening modular API access to our claims clearinghouse, which processes $1.5 trillion dollars in adjudicated claims annually.

***MORE ON THE DETAILS OF HOW WE ARE ENABLING THE NEXT GENTERATION OF CLINICAL WORKFLOW, RCM, AND TELEHELATH APPS IN THE NEXT ARTICLE***

Until then… props to the innovators. It is not just our data and workflows that you can borrow brilliance from to accelerate your healthcare workflow roadmap but also all of the data forced into the world by the regulations listed in my prequal history lesson. Please do disrupt the end user B2B or B2c workflow!

I will leave you with a six-point memo that Jeff Bezos wrote to his employees in 2002:

1. All teams will henceforth expose their data and functionality through service interfaces.
2. Teams must communicate with each other through these interfaces.
3. There will be no other form of interprocess communication allowed: no direct linking, no direct reads of another team’s data store, no shared-memory model, no back-doors whatsoever. The only communication allowed is via service interface calls over the network.
4. It doesn’t matter what technology they use. HTTP, Corba, Pubsub, custom protocols — doesn’t matter.
5. All service interfaces, without exception, must be designed from the ground up to be externalizable. That is to say, the team must plan and design to be able to expose the interface to developers in the outside world. No exceptions.
6. Anyone who doesn’t do this will be fired.

Until next time…

Please email me at [email protected] or DM me on LinkedIn for questions about strategic partnerships with Change Healthcare if you are a digital health entrepreneur or developer.

Click here for PART TWO.

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