The internet has launched a digital revolution in virtually every corner of the economy, from transportation to entertainment and from retail to telecommunications. In comparison with the rest of the economy, health care has been slow to feel the internet’s influence. The internet’s inexorable spread, however, is reaching health care in a big way.
Consumer adoption of video-based telemedicine more than tripled from 2015 to 2016, with the majority of that growth occurring in the last three months of the year, according to a study by Rock Health. Among millennials, 48 percent go online to find a physician, 42 percent have sought medical care or advice over live video and 40 percent own a wearable health monitoring device. Google is investing heavily in genomics, wearables and data analytics, and Apple is partnering with providers, technology companies and others on initiatives including monitoring devices, precision medicine and cognitive computing. We are also seeing technology companies beginning to build broad, national infrastructures in areas such as telemedicine and health care artificial intelligence.
New playing field
In 2017, a key question for legacy provider organizations is how to succeed within the unique, high-powered dynamics of the internet economy. These five tasks respond to that question:
1. Have the urgent desire for change
Like many large organizations in longstanding, highly regulated industries, health care organizations tend to approach change cautiously and incrementally. Successful companies in the internet economy, though, feel the urgent need for continual change. That urgency comes from a recognition that being relevant requires finding new needs to fulfill and that “revolutionary ideas drive the next big growth areas,” according to Google co-founder Larry Page. The enemy of urgency, says Page, is being “comfortable doing the same thing, just making incremental changes.” In the internet economy, staying relevant requires being uncomfortable with the status quo.
2. Experiment relentlessly
An outgrowth of the urgent desire for change is relentless experimentation. Amazon is the poster child for a corporate culture that values experimentation. Amazon has made many of what CEO Jeff Bezos calls “bold bets.” Amazon Web Services, Marketplace and Prime were wildly successful. The Amazon Fire Phone, Destinations hotel booking site and WebPay peer payment service were not. Bezos insists that “failure and invention are inseparable twins,” that “to invent you have to experiment, and if you know in advance that it’s going to work, it’s not an experiment.”
Bezos says that while a methodical assessment is appropriate for irreversible decisions, a faster assessment is better for any decision that doesn’t permanently change the company. Otherwise, the result is “slowness, unthoughtful risk aversion, failure to experiment sufficiently and consequently diminished invention.”
Health care organizations are well-known for being risk-averse and slow to innovate. As the internet economy envelops health care, legacy organizations will need to shed this tendency, something Bezos says is a struggle even for Amazon.
3. Think outside the expertise framework
In the post-industrial economy, successful companies were able to lead with their reputation and their possession of expertise that customers could not access elsewhere. As the internet democratizes expertise, consumers are less likely to be beholden to reputation. Instead, consumers gravitate toward companies that relentlessly work to give them convenient access to desired products and services in a manner that provides the best experience and greatest satisfaction.
The value proposition of legacy health care organizations traditionally has focused on reputation for clinical excellence. The influence of the internet economy, however, will result in fewer organizations being able to distinguish themselves solely by reputation. A more contemporary approach to demonstrating value is to embrace a broader goal of helping people. MD Anderson Cancer Center, for example, has benefited from a reputation for clinical excellence as much as any health care organization. Today, though, MD Anderson is defining itself not by its expertise in treating cancer but by its broader goal of eliminating cancer.
4. Gain capabilities for consumerism, retail care, digital engagement and telehealth
Consumerism, retail care, digital engagement and telehealth are the four corners of a new style of health care.
Consumerism requires understanding the diverse needs, situations and expectations of the individuals you serve, and creating the necessary approaches to pricing, access, engagement and care by population segment. Retail care requires geographically diverse, low-priced, service-oriented access points for low-intensity care. Digital engagement requires creating intuitive, internet-based access to information, tools and services. Telehealth requires using the internet to connect patients with provider services, saving time and expense by removing traditional barriers of geography and the need for brick-and-mortar facilities.
5. Improve your financial stability
On one level, maintaining financial viability requires addressing traditional goals such as operational efficiency. But it also requires a broad outlook — the ability to look toward the horizon, see fundamental changes on the way and develop strategies necessary for the organization to remain relevant.
Financially stable organizations are in a position to pursue novel models of care. Financial stability buys you time to develop new capabilities and make necessary changes in strategy, and it gives you access to capital to invest in new capabilities.
Having sufficient financial stability also makes you an attractive partner for providers with complementary capabilities, innovators seeking to develop and scale new products and services, and top talent seeking diverse experiences and opportunities for growth.
A culture for the internet era
These five tasks for 2017 have strong implications for strategic and financial planning but even stronger implications for organizational culture.
Bezos says that corporate culture is “created slowly over time by people and events — by the stories of past success and failure that become a deep part of the company lore.” The cultures of health care organizations emerged over time in association with longstanding business and care-delivery models. The internet and other forces of technology, however, are shifting the conditions that gave rise to existing cultures in virtually every industry. Organizations long have dealt with changing business conditions, but technology is multiplying the speed and dimension of change. Everything is moving faster.
Bezos also points out that organizational cultures are “enduring, stable and hard to change.” But no organization in any industry has the luxury of time when it comes to reorienting itself to the internet economy.
Kenneth Kaufman is chair of Kaufman, Hall & Associates LLC in Skokie, Ill., and a member of Speakers Express.
The opinions expressed by the author do not necessarily reflect the policy of the American Hospital Association.