I'm sitting on Amtrak distracted by a passenger two rows back, yakking on the phone to her doctor's office. She'd like to transfer her records to another doctor down the street, and alas, such an enormous undertaking cannot be completed in only two days. "Please," she begs, "Could you make an exception?" After half an hour of this, she succeeds. Hallelujah.
Nobody could be surprised by this conversation. When it comes to health care, we are accustomed to pointless bureaucracies and record systems dating from the Mad Men era. But think how shocked the entire train of passengers would have been if this passenger was instead cajoling her bank into allowing her to withdraw cash. Banks have allowed consumers instant access to their money 24 hours a day, on every street corner in the world, for decades. But in health care, it's a major project to move a file down the street.
This is an embarrassing problem for the health care industry. But one businessman sees it as something else: a beautiful opportunity with dollar signs attached. That's the message of a new book, Where Does It Hurt? by Jonathan Bush, CEO and founder of an innovative health care company called athenahealth.
Bush regards health care from the perspective of a successful entrepreneur, and sees the health care industry as "the new oil"--a vast landscape of opportunity with untapped potential. All the waste and inefficiency--estimated by the Institute of Medicine to account for one-third of the spending--are gushers waiting to be discovered.
Bush invites fellow entrepreneurs into the health care industry to "disrupt at the periphery" and focus on "things hospitals suck at"--which he says present a long list of opportunities. The wait times and incomprehensible, often inflated bills at hospitals give entrepreneurs vast, new opportunities to compete by tackling one consumer market (i.e., childbearing women) or one focused service (i.e., MRIs), and delivering care better, cheaper and faster.
For instance, he does a back-of-the envelope business model for storefront $99 MRIs, competing with an academic medical center in his community that charges over $5,000. Even at this dramatically discounted price, the storefront entrepreneur could rake in the profits. He also points to innovators like Wal-Mart, Walgreens, CVS and other retailers that have set up on-site clinics, competing by offering consumers a convenient, low cost alternative to hospitals or doctor's offices. He recommends the deployment of nurse practitioners, proven to deliver certain kinds of primary care as well as physicians do, but at a much lower cost.
Bush is not the first businessman to gaze longingly at the potential profits from the health care industry, with its 18% stake in the U.S. GDP. But despite the financial potential, entrepreneurial infatuation doesn't last long. The endless regulation and red tape in health care block new innovations, and health industry lobbyists are good at stifling disruptive ideas. That's why your local mall doesn't have a drop-in MRI.
But times have changed, which brings some unprecedented new openings for entrepreneurs like Bush. There's a new health care consumer emerging, arising from the adoption of high-deductible health plans, which now cover at least one in five American workers. These patients are paying out of their own pocket for their tests and X-Rays and doctor visits, and that is transforming them from compliant patients into discerning shoppers, looking for the best price and the best care.
As Bush describes it, from the entrepreneur's perspective, you build a business by starting with those shoppers. That means you begin with the patients, and build a service or product that meets their individual needs, solves their problems and/or removes their frustrations. Give the Amtrak yakker instant access to her records. Cut wait times. Make everything easier. Offer a competitive price.
It is an understatement to say this flies in the face of the traditional approach to building a health care business. Typically, if you decide to build, say, a new hospital, you don't start by thinking about your patients, but by researching the payors. You figure out what Medicare or health plans will pay for, then build your hospital to provide those services. The individual patient's particular needs, annoyances, desires, etc., are secondary to the demands of those payors.
Don't misunderstand me, providers care deeply about their patients, but the realities of health care economics have rigged the game so it's harder to put patients first. (David Goldhill brilliantly describes this dynamic in his book Catastrophic Care: How American Health Care Killed My Father and How We Can Fix It.)
Bush is the nephew and cousin of Presidents Bush 41 and Bush 43, respectively, but despite that pedigree, this is not a policy book--and the book's occasional strays into health policy issues are at best naïve. For instance, he recommends paying dying Medicare recipients to avoid hospitals--a rare example of an idea that both sides of the aisle will consider politically incorrect.
But if you skim past the policy ideas to Bush's observations about business opportunities, you'll find some gems and a persuasive call to action for America's entrepreneurs. Whatever you think of the ideas, ultimately, this is a hopeful message for the health care system, and for all of us who count on it to save our lives one day. If you put your patients first, you can strike gold.
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