For Tech Firms, the Health Care Industry’s Shortcomings Are a Big Opportunity

By Isabella Picillo

The emergence of technology has transformed many industries, particularly retail. Today, many people rely on online retailers to purchase items: according to a 2018 NPR/Marist Poll, 25% of adults in the U.S. buy an item online at least once a month. It is not surprising that so many people gravitate towards online retailers. They offer people the convenience of checking out by simply clicking a button while never having to leave the comfort of their homes. Moreover, the growth of online retailers has paved the way for the increased demand for value, or quality care at low costs, as well as consumerization. We have seen online retailers add value to the consumer’s experience by using recommendation engines to suggest products to consumers based on their past purchases, tastes and preferences, and by allowing users to access information about products quickly. Therefore, we see this shift towards consumerization, which means more of a focus on the individual consumer as the end-user. The shift towards consumerization and value has spread to the health care industry in the form of telehealth and retail clinics, reflecting the growing demand for convenience, affordability, and accessibility. 

An early sign of this shift towards health care consumerization was the emergence of retail clinics in the 2000s. These clinics are usually attached to well-known pharmacies and supermarkets, such as CVS, Walmart, and Rite Aid, and they have quickly become popular. For example, a study conducted by Deloitte revealed that one in four participants had used a retail clinic. The Deloitte study highlighted this demand from the consumer side by asking participants to rank the importance of 64 different health care interactions. Participants rated “desire for minimal to no wait times in waiting rooms at doctors offices, hospitals, laboratories, or other specialized providers for testing” and “the availability of appointment for the day and time desired by patients” tenth and twelfth, respectively. Thus, we can see that people want to access health services almost instantly when it is convenient for them. Moreover, consumers also value the transparency supplied by retail clinics in their price systems, since many physicians and emergency room visits have hidden costs and fees. The growing demand for convenient health care at relatively low prices will continue to favor retail clinics. 

Telehealth companies, which use telecommunications and virtual technology to deliver health care services, are similar to retail clinics in the sense that they provide convenient health care at low costs. Telehealth companies avoid many of the issues we see in our current health care system, such as high associated costs and long wait room times. For example, the company Teladoc allows patients to connect with a primary care physician, dermatologist, or behavioral health provider in less than ten minutes, whether it’s via phone, video chat, or app for around $49 per visit. Patients can upload images of their skin issues to the app and then hear back from dermatologists, who also recommend a treatment plan and prescribe medication if needed. Patients can get medical opinions on a medical condition, treatment, and diagnosis, as well as get connected to local doctors via phone or video chat. This type of service is particularly beneficial to patients living in remote areas, who can now access health care services without being burdened by transportation-related issues, such as traveling for care, and associated costs. 

However, there are several drawbacks to telehealth services. Because telehealth does not provide for physical examinations, there may be a higher risk for patient mismanagement, as well as patient misdiagnosis. These effects can be exacerbated by poor internet connection and technological glitches, which make it more difficult for online providers to assess the symptoms of the patients. Additionally, telehealth reduces care continuity; telehealth doctors may not share their observations or treatment plans with the patient’s primary care provider, which can result in incomplete patient medical records. 

Despite these drawbacks, telehealth remains popular, with economists predicting that the global telehealth market will reach $16.7 billion by 2025. We have even seen some providers begin incorporating telehealth services into their practices for acute illnesses and minor injuries. This incorporation is because providers are beginning to recognize that they must find ways to retain patients and keep up with the demand for convenience. Moreover, medical professionals must acknowledge that medicine is no longer merely about providing care but also about delivering value through low-cost individualized care. Medical professionals and health care providers must enhance the experience of their patients, whether it be by increasing transparency or making their experience more patient-centered. These changes can manifest in transparent pricing systems and improving efficiency in waiting rooms, in addition to adopting telehealth services.

Providers can also cater to the modern patient by using the features of apps and wearable health devices to tailor care to the individual. Many of these products are being created by large tech companies, who are trying to break into the health care industry. Apple first entered the medical industry in 2018, when the Food and Drug Administration cleared the Apple Watch Series 4 as a medical device. The Apple Watch can detect falls, monitor heart rate, and notify individuals when their heart rate seems irregular. Some people have generally expressed concern about the legitimacy of wearable health devices, which can provide false positives or negatives. Corporate lawyers can also find narrow legal provisions that let companies receive fast-tracked FDA clearance, raising further quality control concerns. 

Still, these wearable health devices empower patients to monitor significant characteristics related to their physical wellbeing. For example, some devices vibrate when a user’s heart rate or blood pressure is too high, signaling to patients that they need to take steps to address the present health issue. Therefore, people can use these devices to help take better care of their health, and we may even see patients needing to visit their providers less frequently. 

Apple has also created a Health app, which consolidates health data from other devices and apps, that can be used similarly to the wearable health device. The Health app is capable of tracking daily steps, monitoring sleeping patterns, and maintaining food diaries. One of the major concerns of the different health apps circulating is if they properly preserve users’ privacy. Apple, along with many other companies, has taken the necessary steps to ensure that health data is protected by encrypting it. Health care providers can use the features of these health apps, as well as wearable health devices, to cater to the modern patient. For example, the Apple Watch features a health app that can do a form of an electrocardiogram; providers can monitor, from afar, how patients with known heart problems are functioning in their everyday lives. Doctors can also use the information from the patient’s app to develop a plan that is best tailored to their goals, like losing weight, demonstrating how health care providers can leverage technology to add value through individualized care. 

We have seen the emergence of a new type of health care innovation addressing problems in health care delivery that traditional providers have been unable to solve, such as high costs, hidden fees, and long wait room times. Non-traditional actors, mainly tech companies, are leading the way in disrupting older business models, posing a threat to traditional providers.While this disruption is worth encouraging, it is important that the Food and Drug Administration ensures that new players do not forsake the wellbeing of patients by fast-tracking the clearance and approval process for new medical devices and technologies, including telehealth. Only then can we ensure both safety and the proper delivery of care.