With the healthcare budget continuously swelling, digitization seems to be a promising remedy to an exponentially growing problem. As Joseph Kvedar highlights in his Harvard Business Review article “Telemedicine is Vital to Reforming Healthcare,” one of the primary challenges within healthcare around the globe is the requirement for high levels of skill across the chain, which limits the supply of labour and significantly increases delivery costs.
Secondly, costs have also skyrocketed over the last decade due to other external factors. As reported by the Centers for Medicare and Medicaid Services, healthcare expenditures have been at the forefront of political conversation over recent years, especially as the U.S. spent 3.2 trillion dollars on healthcare in 2015, with the federal government being the largest sponsor. Often, healthcare is deemed an unchangeable market, requiring face-to-face interactions and a specific flow of care; the combination of the two has led to a large amount of time being spent on reducing the costs within hospitals. Digitization of healthcare via telemedicine can disrupt this mentality and offer the opportunity for large healthcare chains to deal with concerns of costs as well as labor supply. Telemedicine is hardly a new innovation and can take small forms—from a nurse calling patients when their blood pressure changes to more complex services such as setting up a small hospital within patients’ homes.
A large area of opportunity is chronic diseases, which account for 85% of health care costs. As outlined by Vijay Govindarajan, managing End Stage Renal Disease (covered by Medicare) in the comfort of one’s home can diminish costs by 90%, by switching both the method of treatment and having a doctor on-call via mobile messaging. Memora Health, a company bullish on the telemedicine market, has created a text message application for Diabetes management. Companies like this will completely transform the healthcare market as we know it. Because the cost of care has sky-rocketed, chronic diseases have become predominant, and inefficiencies are maximized when treating these diseases.
While moving towards digital solutions could be hugely effective, adoption of telemedicine as a replacement for over-utilized healthcare seems far off and unlikely. In addition, the way that physicians are trained, research is performed, outcomes are measured, and eventually how insurance is paid out will all need to morph as the model becomes more entrenched. Thus, as imperative as telemedicine could be to creating efficiencies within a struggling market, inertia may be its greatest enemy.
Ashiana Jivraj (MBA ‘19) is a dual degree DMD/MBA passionate about issues of costing within health systems. Prior to her graduate degrees, she attended Barnard College of Columbia University, and studied Biology. She focuses her research on access to dental care in lower and lower middle income countries.