{"id":26812,"date":"2017-11-15T22:55:06","date_gmt":"2017-11-16T03:55:06","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/increased-competition-from-the-digitalization-of-healthcare-delivery\/"},"modified":"2017-11-15T22:55:06","modified_gmt":"2017-11-16T03:55:06","slug":"increased-competition-from-the-digitalization-of-healthcare-delivery","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/increased-competition-from-the-digitalization-of-healthcare-delivery\/","title":{"rendered":"Increased Competition from the Digitalization of Healthcare Delivery"},"content":{"rendered":"

Organization Selected: <\/strong><\/p>\n

Cardio Edge<\/u> (pseudonym) is a rapidly-growing healthcare company which offers cardiovascular risk screening through specialized echocardiogram, EKG, and carotid scan tests.\u00a0 This screening reveals risk levels for serious medical events such as sudden cardiac death (SCD).\u00a0 A medical treatment paradigm is analogous to a supply chain which delivers good healthcare outcomes to consumers by involving a range of steps.\u00a0 In the context of professional and elite collegiate sports, this paradigm can span from a casual team athletic director to diagnostic equipment technicians, cardiology specialists, surgeons, and personal primary care physicians.<\/p>\n

Essay: <\/strong><\/p>\n

The delivery of healthcare in the United States is undergoing rapid changes because of the digitalization of treatment paradigms.\u00a0 This digitalization is in part due to The Health Information Technology for Economic and Clinical Health Act (HITECH), which authorized up to $27 billion in incentive payments to spur the adoption and \u201cmeaningful use\u201d of electronic medical records (EMRs).\u00a0 [1] Before this movement, the traditional supply chain of healthcare delivery has relied on physical medical files, in the context of a highly-fragmented US system.\u00a0 This \u201cclunky\u201d and haphazard legacy resulted in long lead times between steps as information was manually located and carefully transferred in compliance with HIPAA guidelines.\u00a0 This all but necessitated a limited, localized supply chain with high barriers to entry.\u00a0 Today, EMRs generated from connected ultrasound machines can give instant visibility into customer demand for expert review and enable a physician in San Francisco to be sourced as-needed to review New York City patients.\u00a0 [2] In the age of a digitalized healthcare supply chain, Cardio Edge<\/u> will need to be mindful that competitors can emerge more quickly due to the advent of electronic healthcare data and smart, connected products.<\/p>\n

To build competitive insulation in an age of digitalized healthcare delivery, Cardio Edge<\/u> is focusing on growing the scale of its proprietary database, building more specialization into its portion of the value chain, and reinforcing its complementary technology stack.\u00a0 The larger the database, the more Cardio Edge<\/u> can put individual results in context and discover associations and understand patterns and trends to ultimately improve care, save lives, and lower costs.\u00a0 [3] Thus the same supply chain can now produce two very valuable outputs, the screening services and the accompanying data aggregation.\u00a0 While the value of the primary services is linear, the value of the data can be described more as an exponential function, and a near-term, volume-based business development strategy will maintain this advantage away from potential competitors.\u00a0 Equipment technicians are just one part of the cardiovascular health supply chain, but errors there can drive issues in downstream evaluation by cardiologists.\u00a0 And downstream errors are tougher to rectify when physician \/ technician interaction is 500 miles away rather than 50 steps away.\u00a0 Hence, in an age of portable medical records, quality is increasingly important and Cardio Edge<\/u> is solidifying its competitive position by improving technician selection and training systems.\u00a0 The connected mobile-wireless ultrasound machines used for echocardiograms merit an entirely new technology infrastructure.\u00a0 [4] For example, identity and security software is a longer-term measure needed to add security given a shift to technicians entering data rather than patients.\u00a0 One of these identity and security systems is work modality list software, which reduces risk and liability tied to typographical errors on medical records [5].\u00a0 In an increased competitive environment, profits and switching costs are planned to be increased through offering tangential services such as EMR storage \u2013 essentially owning more of the technology stack.\u00a0 All these actions will help to solidify Cardio Edge<\/u>\u2019s position by galvanizing and better leveraging its own role in the digitalized supply chain.<\/p>\n

My recommendations are geared towards making the data as much of a focus as the direct screening itself.\u00a0 Digitalization of the healthcare supply chain has coincided with a trend towards very valuable data sets, and healthcare M&A has confirmed how much value exactly there is to be had.\u00a0 On paper, Quintiles and IMS Health would seem an odd match for their $9 billion 2016 merger, but that was an opportunity for a contract research organization to capitalize on real-world data provided by IMS Health, plugging an external information source into Quintiles\u2019 budding application platforms.\u00a0 [6] By acquiring Truven Health for $2.6 billion in 2016, IBM was able to fuel its Watson analytic engine with one of the world\u2019s largest repositories of health-related data, bolstering its own technology stack.\u00a0 [4] [7] To develop Cardio Edge<\/u>\u2019s own data set to the fullest, a fairly logical recommendation would be to ensure new customer contracts give Cardio Edge <\/u>full rights to aggregated, blinded data.\u00a0 Another mechanical opportunity would be to incentivize long-term contracting to keep out competitors while building progressively larger data sets.\u00a0 Longer term, it may make sense to develop an application platform to build out the technology stack and provide external users an improved service and enable athletic benchmarking and business use.<\/p>\n

Open questions for further examination include whether the digitalization of patient data will ultimately influence risk regarding patient privacy, and if so, what might be the best opportunities to mitigate that risk?\u00a0 [8] 100,000 patient EMRs can be carried away more easily than 100,000 physical dossiers strewn across 1,000 hospitals.\u00a0 Also, in this supply chain, EMRs may ultimately lower costs in the long-term by systems like IBM Watson to replace physician judgement through automated sensors.\u00a0 [9] How realistic is this given legal considerations, and how long could it take?<\/p>\n

(795 words, excluding footnotes)<\/p>\n

Sources:<\/strong><\/p>\n

[1] David Blumenthal, M.D., M.P.P., and Marilyn Tavenner, R.N., M.H.A.\u00a0 New England Journal of Medicine 2010; 363:501-504August 5, 2010DOI: 10.1056\/NEJMp1006114<\/p>\n

[2] Schrauf, S. and P. Berttram, Industry 4.0: How Digitization Makes the Supply Chain More Efficient, Agile, and Customer Focused, PWC Strategy& (2016)<\/p>\n

[3] Raghupathi and Raghupathi Health Information Science and Systems 2014, 2:3 http:\/\/www.hissjournal.com\/content\/2\/1\/3<\/a><\/p>\n

[4] Porter, M. and J. Heppelmann, \u201cHow smart, connected products are transforming competition,\u201d 性视界 Business Review (Nov. 2014)<\/p>\n

[5] Kuzmak, P.M. & Dayhoff, R.E. Journal of Digital Imaging (2001) 14(Suppl 1): 153. https:\/\/doi.org\/10.1007\/BF03190323<\/p>\n

[6] Hallam, Kristen and Tracer, Zachary.\u00a0 \u201cIMS Health to Buy Quintiles in $9 Billion Pharma Data Deal.\u201d\u00a0 May 3, 2016, 6:18 AM EDT.\u00a0 https:\/\/www.bloomberg.com\/news\/articles\/2016-05-03\/ims-health-to-merge-with-quintiles-in-deal-valued-at-23-billion<\/a><\/p>\n

[7] \u201cIBM Watson Health Announces Plans to Acquire Truven Health Analytics for $2.6B, Extending Its Leadership in Value-Based Care Solutions.\u201d\u00a0 Press release.\u00a0\u00a0 https:\/\/truvenhealth.com\/media-room\/press-releases\/detail\/prid\/185\/ibm-watson-health-announces-plans-to-acquire-truven-health-analytics<\/a><\/p>\n

[8] Patil, Harsh Kupwade, and Ravi Seshadri. “Big data security and privacy issues in healthcare.”\u00a0Big Data (BigData Congress), 2014 IEEE International Congress on<\/em>. IEEE, 2014.<\/p>\n

[9] Dilsizian, S.E. & Siegel, E.L. Curr Cardiol Rep (2014) 16: 441. https:\/\/doi.org\/10.1007\/s11886-013-0441-8<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Today, EMRs generated from connected ultrasound machines can give instant visibility into customer demand for expert review and enable a physician in San Francisco to be sourced as-needed to review New York City patients.\u00a0 [2] In the age of a digitalized healthcare supply chain, Cardio Edge will need to be mindful that competitors can emerge more quickly due to the advent of electronic healthcare data and smart, connected products.\u00a0<\/p>\n","protected":false},"author":9753,"featured_media":0,"comment_status":"open","ping_status":"closed","template":"","categories":[2029,2470,4187,41,17,4188],"class_list":["post-26812","hck-submission","type-hck-submission","status-publish","hentry","category-digitization","category-emr","category-hcit","category-healthcare","category-supply-chain","category-tomrocks","hck-taxonomy-organization-cardio-edge-pseudonym","hck-taxonomy-industry-health","hck-taxonomy-country-united-states"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/rc-tom-challenge-2017\/","yoast_head":"\nIncreased Competition from the Digitalization of Healthcare Delivery - 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