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Healthcare Platform Megatrends Presentation at MIT: Slides and Video

HC Platform MT Slide1

by Vince Kuraitis and Randy Williams

We were honored to give the keynote presentation — “Healthcare Platform Megatrends” — at the MIT Initiative on the Digital Economy event: “The Platform Revolution Comes to Healthcare“.

Here’s a brief summary:

Digital platforms are powerful. 7 of the 10 most valuable companies in the world are powered by platforms.

But…healthcare is late. Today in healthcare digital platforms are understood mostly as a technology construct. That’s not wrong, but it is severely limiting.

Tomorrow, platforms will be understood as central to operational and business strategy. Healthcare is just discovering network effects β€”the single biggest differentiator in platform success.

Platforms and Network Effects 101

  • Traditional business models are linear “pipelines”.
  • Platforms enable producers and users to exchange different types of value. Value is created outside the organization, not inside.
  • Platforms leverage network effects

Setting Context β€” Platforms in Healthcare

Healthcare is different than other industries:

  • Healthcare – a human right or a market good?
  • Complex
  • Misaligned economic incentives
  • Highly regulated
  • Opaque (prices, quality, outcomes)
  • Culture – controlling vs. collaborative
  • Fragmented

There are only 2 ways to connect nodes in a network:
1) Point-to-point β€” fax, email, phone, in-person contacts
2) A platform

Point-to-point networks are difficult to scale; the number of potential connections increases almost exponentially. Each connection point can be viewed as a failure point β€” a chance to miss sharing critical information about a patient or to follow up on necessary action.

Healthcare Platform Megatrend #1 — SYNERGY Platforms advance (and are advanced by) 4 key healthcare trends

A McKinsey study from 2015 examined digital adoption across 22 industry sectors. Healthcare ranked #19. This helps explain why platform adoption in healthcare has been more than a decade late.

We briefly describe 4 important healthcare industry trends:
1) Value based care and payment
2) Consumerism
3) Interoperability/data sharing
4) Home and virtual care

Each of these trends is synergistic with platform adoption in healthcare, for example:

Value based care and payment drives platform adoption,
…and, in turn, platform adoption drives value based care and payment.

This creates a positive feedback loop β€” a flywheel effect.

Healthcare Platform Megatrend #2 β€” Investment in digital health is fueling platform growth

If data is the new “oil”, then digital infrastructure in the new “drilling rig”. Substantial investment in new digital infrastructure in healthcare is occurring.

Platforms now account for greater than 40% of digital health investments. 1/3 of CB Insights Top 150 digital health companies are platforms. Platforms achieve a 2.8 x valuation premium.

We highlight a few sectors to watch: telehealth/virtual care, wellness and caregiver support, clinical niches (cancer, renal, mental health, reproductive), and AI/ML powered diagnostics and provider support.

Healthcare Platform Megatrend #3 β€” Platforms are shaping new operational ecosystems.

Healthcare is operationally challenged:

  1. Tech infrastructure
  2. Data model
  3. Care model

Platforms liberate data and consumer demand in each of these areas. For example, platform infrastructure liberates data and demand because it is cloud native, embraces interoperability standards (e.g., FHIR APIs), and is mobile friendly.

Healthcare Platform Megatrend #4 β€” Platforms are transforming the competitive landscape in healthcare

Incumbents are besieged by a barrage of new platform competitors: virtual care platforms (VCPs), Big Tech, Big Retail, point-solution offerings, local/national health plans, hospital-at-home companies, second opinion programs, and others.

Incumbents are fighting back β€” we’re observing the rise of collaborative platforms, e.g., xealth, Truveta, GraphiteHealth.

Over time, today’s healthcare point-solutions will be absorbed into or will build upon platforms. If you’re looking for an example of how this can happen, look no further than your smartphone. Think of your phone’s capabilities that previously used to exist as disparate hardware and software — video games, a camera, a flashlight, an auto navigation system, and millions of apps.

FHIR APIs are more than a technical compliance mandate. Every healthcare organization should now think of itself as a digital platform β€” and develop a supporting business model and strategy.

Many industry sectors have become dominated by mega-platforms, e.g, Google in search, Amazon in e-commerce, Facebook in social. Will healthcare see the emergence of mega-platforms and/or super apps? Over the course of a decade, we believe the answer is “yes”. Today, the closest thing to a mega-platform in healthcare is Ping An Healthcare in China.

We conclude on a note that is upbeat, provocative and aspirational: we believe healthcare will become the “pinnacle platform industry” β€” the one ultimately seeing the highest levels of platform adoption and the greatest value created for patients and healthcare organizations.

Slides and Video

…and we’re glad to share our slides and video of our presentation.

 

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