No More Barrier to Entry

Recently I've been having more frequent conversations with healthcare leaders regarding the changing landscape they find themselves immersed within. Everything from provider burnout to decreasing reimbursement, I don't envy them. However there is one other shift to the landscape that is becoming more frequently raised in these discussions; competition.

For decades the mantra in healthcare has been "healthcare is local." It is rooted in the idea that the relationship between a patient and their physician is foundationally 'personal,' and is perpetual as the physician "gets to know me and my story." I think that exudes the way it should be, and might have been once.

That said, it has also been the foundation of any health system's or health plan's competitive advantage. If "my" health system employs "my" physician, or they are in my health plan's network of providers, "I" was captive as a patient to that health system and/or that health plan.

It used to be that the patient chose doctors who were geographically nearby, based on convenience and familiarity (i.e., they know the local hospital). Historically health systems and health plans used this paradigm as their real competitive strategy. If they employed or were affiliated with "my" physician, or "my" physician were in their network, I was captive as their patient. My inherent proximity to my physician became a barrier to other health systems or plans 'stealing' me away as a patient (aka, "consumer"). This is antiquated thinking, and is already resulting in massive shifts to the landscape driven by those healthcare leaders who understand this.

Today, driven by both the ubiquity of telehealth options and a lack of physicians accepting patients, there is no longer a geographic "barrier" to the physician-patient relationship. In most cases my physician could be across the state, in another state entirely, or even in another country. The fact that I'm wearing a smartwatch or monitoring device (think continuous glucose monitoring) that captures and conveys validated biometric data and that physician 3 states away has as much information as they did when we were in the same town getting lab results from the local lab or hospital.

And if you're a bit of a futurist, it doesn't stop with monitoring and biometrics. With the advances in robotic surgery, its not that far-fetched to envision a future where the relationship between the surgeon and the bricks-and-mortar hospital or ASC where I have my procedure is no longer geographically bound. The surgeon can be across town, our in another country. This is the future (present?) Thomas Friedman wrote of in 2004 with "The World is Flat," required reading for the c-suite of many Fortune 500 companies.

This means that I as a consumer now have a lot more choice regarding from whom, how, and where I get my healthcare. This then has a resonating effect on health insurers and their strategies to build provider networks. How do they attract and retain me or my employer as a client unless they offer coverage for the physician I choose, not the limited list they choose to add to their network? How does the local hospital or health system think they can keep me "in their network" and maximize the "share of healthcare wallet" they obtain from me?

The historical "healthcare is local" mantra as a barrier to competitive entrants is waning. Healthcare leaders today can't rely on geography being a barrier to competition. Perhaps the last bastion of this vestigial construct is regulatory as specific medical colleges and regulators try to control who can provide care, write prescriptions, or offer insurance in their state, province, or country. How much longer will consumers buy-into that concept before they too fall? Medical Tourism is already demonstrating patients are prepared to travel to the care. So do they really buy-into "things are different here, so we need to regulate them uniquely" arguments? I don't think so.

All of this is to say that the future of healthcare competition will be based on customer satisfaction, and not these archaic 'walled gardens' of geography. As that ensues I predict we will see more and more organizations realize that healthcare is going to be more about logistics and customer experience, and less about "control." When we talk about logistics and convenience in the consumer context, what brand comes to mind? Amazon!

That's not to suggest that I'm convinced Amazon will be the ultimate healthcare provider. But what they do well in the generic sense is create an experience that stitches together different providers of services and products that they may only loosely control. It is then the experience - convenience - that keeps me coming back. It isn't their manufactured product I'm buying, they are simply the 'department store' I can shop at from home.

I believe success in healthcare will be achieved by the organizations that realize this and shift to this mind-set, rather than try to 'trap' patients, employers, and providers into narrow networks of top-down control. And it won't just be the 'buying' process of choosing a provider that drives the experience. It will include the aggregation of information and communication between different participants in the supply chain of that service. Recognizing that "my" health information resides in vast array of places the idea of a single EMR or EHR that contains all the information is again antiquated, 'top-down' and 'trapping' thinking. As "I" choose a service provider their ability to access my information as I choose will remove friction from the experience, and keep me using that service. The provider "I" choose having the ability to communicate with any other provider I have chosen - even if they've never met or have no data sharing agreement between them - will be crucial.

In essence, I'm envisioning a future where healthcare is delivered to each of us via a dynamic and ever-changing network of providers and supports that we each control. And there are a number of players in the industry that get this. Amazon is one. Another is Providence with their incubation and recent spin-out of Praia Health and announcement that the Providence Health Plan is expanding beyond the geographies its historically operated within. Walgreens, Walmart, and CVS are others that are experimenting with various models all focused on consumer choice. And of course many health plans from Aetna to United Health Group / Optum to many of the Blues are realizing that to survive in the future they will need to do more than simply aggregate risk and process payments.

The days of geography creating a barrier to entry from competition are gone. And I'm excited to see how battle-lines and strategies are pursued to win me over as a consumer of care with choice. In the end, I have to believe my experience will be improved.