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Innovation and the Healthcare Supply Chain

Posted by Joe Antle on July 2, 2018 2:05 PM EDT
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In our blogs, the three of us (me, Chip and Thomas) focus primarily on reducing the demand for expensive health care products and services....

...that seems to only get more expensive over time due to excess demand for them.  And the fact that more healthcare consumers are poorly educated about options and pay little attention to the reduction of poor health risk through healthier lifestyles in terms of nutrition, physical activity, emotional well-being, social, career and community wellbeing only exacerbates the problem.

So, because the focus on improving the healthcare system has not yielded enormous breakthroughs in the lowering of costs and better quality of healthcare, we have felt it our mission to focus mostly on this side of the healthcare crisis equation.

However, there is a strong body of research and collective thought around how to reduce the cost and improve the quality of the healthcare products and services themselves.  In fact, there is far more information and more general consumer interest in this aspect of the healthcare ecosystem.  Our voices will undoubtedly be lost singing out the many things being done by manufacturers, health insurance carriers, healthcare providers and facilities in the broad and more traditional focus on applying innovation and new thinking to the healthcare supply chain.

With this idea in mind, that idea being the three amigos bloggers in the HealthETeams Support Group will not stray too far afield of our primary focus on changing the axis of demand for healthcare products and services, I'll briefly comment about an interesting article I read written by Lisa Schencker of The Chicago Tribune.

Ms. Schencker's article focused on the trend that more doctors are embracing a different business model, one in which they serve fewer patients, more fully and reject health insurance as the primary financial mechanism to reimburse them for services.  Instead, this growing group of doctors is creating a new space called direct primary care doctors and they tend to see far fewer patients than traditional providers.  Like the trend to not overshoot basic health diagnosis solutions by providing new channels of healthcare diagnosis and pharmaceutical prescription writing through the advent of telehealth and telemedicine, direct primary care doctors charge membership fees which cover a host of basic services that members need more often.  Then the members are able to purchase catastrophic coverage for extreme major medical issues which may be unforeseen.

Ms. Schencker points out that this trend is somewhat different from the trend called concierge medicine which aims for the very high end of the market and does, in fact, accept health insurance remuneration.  In addition, the concierge concept focuses on the higher end of the market and the direct primary care provider concept tries to serve patients from all ends of the economic spectrum.  This technical difference doesn't mask the fact that by providing new ways to serve patients and to finance those services in different economic models, these trends may offer distinct value to patients who have predictable chronic illness issues or who are generally healthy.

It's hard to say what will be the intended longer term impact of these new trends in the supply side distribution model for healthcare.  But one thing is for certain, as with all disruptive industries that become expensive, offer poor access, are too complex to understand and vastly overshoot the needs of most consumers....that is we will continue to see bold challenges to the status quo of healthcare delivery, purchasing and financing.  Our focus will remain primarily on the demand side of the equation. 

So, this blogger and my colleagues believe that increasing efforts of all sorts to innovate along both the supply and demand sides of the healthcare ecosystem can yield great long-term results.  And to the three of us, that is a very good thing!

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