Why haven’t we seen a single front door for healthcare?

Why has tech forced most industries (eg retail, TV) to innovate or die, yet the same can’t be said for healthcare?

In retail, Amazon leveraged tech to own the digital front door for online retail - aggregating consumer demand and product supply.

In TV/film, Netflix leveraged tech to own the digital front door for entertainment - aggregating consumer demand and content supply.

Amazon and Netflix won based on superior consumer experiences and results - and they had to win on these dimensions because switching costs are low and consumers have choice. No longer are local retailers or TV stations in control. Deliver better results at a lower cost or be at risk of going under.

So why haven’t we seen the Amazon of healthcare?

It’s taken so long that even Amazon now wants to be the Amazon of healthcare!

Rather in healthcare, we see both high performing and low performing providers deliver a fair amount of care. Quality and patient safety can vary widely even in the same city (sometimes in the same hospital).

Patient demand does not aggregate to a few main players. Patients and consumers are not simply flocking to providers who will deliver better patient experience and outcomes, which would force lower performing providers to raise their game.?

We have hundreds of fragmented health systems and thousands of fragmented providers delivering variation in care and therefore variation in patient outcomes.

What’s so different about healthcare? Why can’t a few players outcompete the rest by delivering better outcomes and patient experiences?

A few reasons come to mind:

1. Humans still deliver a lot of care, which means improvements in the "product" don’t scale: Amazon and Netflix can automate 99% of the service. Make an improvement in the tech and every consumer immediately benefits. However, software can’t replace a surgeon operating on you or a nurse caring for you (yet!). A learning acquired by one doctor won’t instantaneously copy to every other doctor (although I suspect some futurists would tell me that this is inevitable! Star Trek’s holographic doctor, anyone?).

Also, providers enjoy autonomy and some are unwilling to standardize how they deliver care to match new evidence-based best practices - even if the data shows it’s better for patient outcomes. Why? Humans just don’t like changing how they do things. Humans (especially physicians) want autonomy. So the best providers and how they operate can’t be easily scaled.?

2. Brick and mortar still matter which means less competition in less profitable regions: Unlike retail and TV, there is still a huge component of in-person healthcare delivery. You can’t digitize the best hospital facilities and the majority of in-person care. Physical care will remain a big part of healthcare. How much competition is there to deliver high quality care in the lowest density and hardest to reach geographies? A lot less than in major cities. Netflix's cost and care delivery structure doesn't change whether it's serving a consumer in rural Alabama or New York City - but a health system's would.

3. Perverse financial incentives: Much of healthcare is still heavily fee-for-service. This not only limits high reliability, high quality care from being prioritized as a market differentiator, but this also means there are a lack of guardrails to stop those who put profits before patients. For example, I recently heard about ophthalmologists who prioritize patients on the cataract surgery waitlist based on who was upsold on more expensive lenses. I also heard about radiologists who bring patients back on two different visits for imaging so they can bill twice, even though it can all be done in one visit. Can you imagine the customer churn if Amazon forced us to make multiple orders with duplicate shipping fees? While I believe most providers have good intentions, we are all familiar with providers who do need guardrails. As long as incentives remain misaligned, better consumer experience and results won't be prioritized.

The critical question: Do we WANT the Amazon of healthcare?

Even if one or a few players could be the steward for healthcare delivery, would patients and consumers truly be better off? Or do the high switching costs of changing providers mean more competition is better to keep providers honest? Would less competition drive up pricing and thus costs (especially in the U.S.)?

It's not the end of the world if Netflix dominates TV and film - we can live just fine if the quality of streaming deteriorates over time.

However when it comes to healthcare and the high switching costs of moving providers, it's not okay if there is a single front door for healthcare and quality and cost deteriorates.

One to watch will be Kaiser Permanente and their plan to build the front door for healthcare as a health system, instead of as a consumer company like Amazon. Just last week we saw KP's big move acquiring Geisinger and announcing that more consolidation is on the way - with the aim of leveraging their know-how and scale to accelerate the path to value-based care.

Will improved quality at a lower cost finally be a true market differentiator?

I hope KP is right because at the end of the day, healthcare is about achieving better human health.

As more health systems consolidate and technology advances, the front door for healthcare will become the frontier on which health systems compete. Due to financial constraints, many will focus in the near term on consumerism and convenience, but I believe those who can deliver high reliability, cost-effective care at scale will win longterm.

Because ultimately in healthcare, the product we must deliver isn't simply access to care - the product we must deliver is better health for all.