The barriers between healthcare and tech companies are disappearing as companies focused on greater efficiency disrupt the landscape, Bob Kocher and Bryan Roberts, investors at a venture capital firm Venrock, write at Harvard Business Review.
They point to the myriad ways in which technology is promoting services, while eliminating jobs not focused on providing care, including:
- Digital insurance markets
- Digital price transparency tools
- Cloud services
- Self-service mobile applications
Reducing healthcare administrative costs is projected to save up to $250 billion a year, they say.
To seize on the opportunities that software-as-a-service offers, they urge companies to:
- Attack inefficiencies to generate quick customer return on investment
- Focus on improvements for the network, in which one user enhances the product's value for others, including future users
- Use software-enabled service models, rather than pure software-as-a-service, so that it helps patients adhere to high-quality, cost-effective care
"As each innovation wave generates more data, disruption-cycle times will shorten, thereby forcing all players in the healthcare ecosystem to address inefficiency as they compete on quality and value creation. Those who fail to act will be washed away by the tide that lifts all other boats to greater productivity," they write.
Funding for digital healthcare startups in the U.S. is expected to double to $6.5 billion by the end of 2017, FierceHealthIT previously reported. The market is moving toward what global consulting firm Oliver Wyman calls Health Market 2.0--a focuse on prediction and prevention rather than traditional cures.
The transition to personalized healthcare delivery and incentives for health information exchange will boost adoption of cloud services in healthcare, with the market expected to hit $3.5 billion by 2020, according to a Frost & Sullivan analysis.
Savvy healthcare CIOs should focus on buying effective services, not mega-expensive hardware, Dick Escue, CIO of Valley View Hospital in Colorado, writes at Becker's Health IT & CIO Review.
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