Periodic revolution, “at least once every 20 years,” is “a medicine necessary for the sound health of government.” – Thomas Jefferson
The HealthCare IT (“HCIT”) industry clearly doesn’t subscribe to Jefferson’s edict, not that there hasn’t been a need. For the past 30 years, the industry simply could not tolerate massive changes: legacy systems had become too enmeshed into the fabric of large healthcare organizations to change readily. There was too much risk to try something new.
That is no longer the case, and I believe three important people have set in motion factors that make the industry ripe for a revolution.
#1 President Obama
Regardless of your assessment of his presidency, President Obama’s efforts and subsidies to fund the digitization of healthcare records for Meaningful Use Phase 1 (and now Phase 2) have forced the HCIT industry to move into the 21st century. We at TigerText see this impact across every customer we service. These movements to upgrade the way information is collected and retrieved would likely have taken decades longer to occur without public sponsorship. I believe this step is foundational, and now that this transformation is well underway, the ability to innovate technologically is substantially greater than was the case 4 years ago.
#2 Steve Jobs
The iPhone (and all of its subsequent competitor smartphone iterations) re-imagined what was possible within mobile. Enter Healthcare IT, which is uniquely well-positioned to harness the power of mobile computing to deliver higher quality care more efficiently. A fortunate driver of this: Physicians massively over-index the rest of the population for smartphone penetration due to their early recognition of the benefits that having such a powerful computer in the palm of your hand bring. Healthcare workflow is inherently mobile as clinicians constantly transition between desktop and mobile – there is a need for solutions that can travel between the two modalities to retrieve and deliver information on a real-time basis. This frequent mobility is part of the reason why texting in healthcare is so prevalent; it is a more efficient way to transmit unstructured data. Think about this: the computing power on current smartphones exceeds the computing power relied upon by NASA for the Apollo missions. I believe such astonishing advances will dramatically improve decision-making, response times, and transparency in healthcare over time.
#3 Marc Benioff
At first glance, Salesforce.com, a Customer Relation Management (“CRM”) software company, doesn’t seem hugely relevant to Healthcare. However, Marc Benioff – founder of SalesForce.com – essentially kicked off the Software As A Service (“SaaS”) and Cloud IT revolution. Others have played large roles in this movement but it was Benioff’s tireless evangelizing to Corporate CIOs around the country that fundamentally altered attitudes in large IT organizations. And as he did this, SaaS gained the credibility that convinced CIOs that they did not need to buy hardware and host software on-premises for every solution. Enormous cost advantages and flexibility are to be gained by paying only for what you use instead of having to maintain a massive hardware infrastructure. The impact of SaaS in healthcare is only just beginning to be felt but will result in substantial cost savings. These savings will allow CIOs to take more risks in trying new software without blowing their entire IT budget. With experimentation and risk come great advances in innovation. At TigerText we see this first-hand as we receive real-time feedback from our 250+ customers every day and promptly incorporate into our product development.
When you look at these three people and their associated megatrends – healthcare digitization, advanced mobility, and the advent of SaaS and the Cloud – I firmly believe we are ripe for an incredible period of innovation and cost savings in healthcare over the next decade, contrary to the many doomsayers out there.
The current environment in HCIT is very reminiscent of the dawn of airline deregulation and its impact on logistics spending when FedEx launched 30 years ago. In 1980, logistics comprised approximately 17% of U.S. GDP. Today, logistics comprises approximately 9% of U.S. GDP, representing incredible cost savings and an associated improvement in productivity to the economy. In 2011, Healthcare expenditures comprised a similar 18% of U.S. GDP. 31% of these expenditures went purely to administration (double that of Canada).
In a $15 trillion U.S. economy today, every 1% reduction in healthcare expenditures represents $150 Billion in annual savings to be reinvested elsewhere – a massive boon.
At TigerText, we take pride in the fact that we could not have existed even 4 years ago. We embrace the fact that we are charting a path for substantial change in the largest industry in the U.S. Indeed, we say Let Revolution Begin!