Dennis de Champeaux, who runs Ontooo, questioned the viability of eHealth last year. He argued the US has not been able to achieve cost effective quality healthcare (which is eHealth’s key potential contribution) and there is no stakeholder that eHealth can do business with. His post was picked up by an east coast VC – who was sick and tired from pie in the sky eHealth business plans – that he put it on his blog at www.sacredcowdung.com. It was actually a devil’s advocate argument against eHealth with the hope to elicit defenses for eHealth. The opposite happened and respondents agreed with the conclusions. I enjoyed his earlier article and asked him what he thought about eHealth, one year later. Here’s his guest article answering the question.
The arguments against eHealth are grounded on an astonishing phenomenon: the nation spending nearly twice as much on healthcare (in terms of percentage of GDP) than other nations while the yield is less. Apparently the nation is not able to cap spending, enforce quality control and do productivity management of this cost component of the economy.
This phenomenon is at the same time the ultimate justification for eHealth: the trend of gobbling up an increasing percentage of the nation’s revenue cannot be sustained. However, this begs the question when the trend will max out, and whether we will live to witness it.
At this point, we can point only to some lights at the end of the proverbial tunnel.
Business CEOs use typically the polite phrase “the healthcare system is broken”. They have been confronted for many years with double digit premium increases for the healthcare benefits of their employees and their dependents. Although these benefits have taxation advantages the money has to be earned first. Many companies have decided that they cannot continue subsidizing the nation’s healthcare largesse. Hence they demand increasing co-payments from their employees or they negotiate programs where the employees are fully responsible for the premiums, with or without a range of deductibles. Unions have organized strikes to counter these developments, but the message is clear: someone else paying the healthcare bills for those in the workforce is slowly becoming a thing of the past. Most people in the workforce are actually light users of the healthcare services – according to the 20-80 rule – and hence are not financially impacted by large expenditures. Still uncertainty is injected in their lives, which makes them potential clients for decision support services provided by eHealth.
New Medicare recipients are confronted as well with multiple choices regarding the programs they can subscribe to, which have their own ranges of premiums, deductibles and co-payments. The current Medicare recipients are not yet computer literate enough to be customers of decision support services and/or of eHealth services for treatments of chronic conditions. The upcoming generation of baby-boomers is a different story. It is hard to envision how to take care of this cohort without increased self help facilities provided by eHealth services.
The key novelty in both preceding developments is that the patient, the care consumer, becomes – at least partially – financially responsible, which is a prerequisite for being a customer of eHealth services.
Rolling back an entitlement can produce counter maneuvers. A recent development in the Netherlands is a baroque illustration. The Dutch government, which is a major force in the Dutch healthcare system, introduced on January 1st new, nationwide procedures. To increase self responsibility they created financial rewards for those that do not use certain healthcare services during a certain period; a kind of no-claim arrangement. Lawyers filed immediately a class action suite arguing that chronic patients were discriminated. A judge rejected the claim, which is surprising since ‘solidarity’ is a deeply entrenched principle in the Netherlands that has been used to accommodate the disenfranchised. Creative US lawyers will likely also temporarily derail measures to make individuals more financially responsible for their care.
The medical establishment is another inhibitor against eHealth innovation. General practitioners have claimed that tele-diagnosis is “bad medicine” and since patients did not pay for services, and thus could not vote with their feet, there were no incentives for physicians to offer tele-consultation services. Consumers becoming more financially responsible for their care is changing the status quo. At least one company is offering already tele-consultation services. An early report claims that they have to advice only in 8% of the tele-sessions that a face-to-face consultation is required. No law suites were filed thus far and customer satisfaction appears to be OK.
Conclusion: eHealth appears to be viable after all and the lights in the tunnel are brightening.