Regardless of this November’s election and whether it leads to further weakening or reinforcing of the Affordable Care Act, it is clear that entrepreneurs and investors putting time and resources into platform businesses have no shortage of opportunities to reduce waste by connecting different constituents and facilitating efficient information exchange.
It’s tough to find an industry where there is a greater need for information transparency than health care; numerous application examples abound, from avoiding medical billing surprises to simplifying complex negotiations between pharmaceutical manufacturers and pharmacy benefit managers to establish consistent drug pricing.
Today, there is a plethora of financial applications that Fortunately, we don’t have to look too far in the health care space to see others leveraging such platform concepts to rapidly reduce transaction costs and foster an environment for rapid innovation.
Conflicting or competing interests (often financial) between constituents complicates things further; for instance, payers employ utilization management tools to try to reduce inappropriate use of high cost tests, procedures and prescription drugs, while doctors want to get their patients timely care and spend their time providing care (not processing paperwork).
One timely example of platforms bringing transparency to health care decisions is real time benefits tools (RTBTs) that companies such as RxRevu are bringing to market.
Historically, however, each of these technology solutions would need to build one-to-one individual integrations with each health care organization, and vice versa, resulting in tens or hundreds of often duplicative connection points required to achieve connectivity and electronic data exchange.
But beyond this, when platforms are built using modern technology and allow other innovators to build solutions “on top” of the existing platform infrastructure, they reduce development, distribution and deployment timelines and costs.
They can improve their patient population outcomes through a variety of means, including via telehealth technology, care coordination systems, remote patient monitoring, social determinants of health and patient engagement.
One such organization making headway in this space is Redox, a health data platform that is building a platform of integration tools while using a networked approach to dramatically bring down the costs of integration.
Unleash a virtuous cycle of further innovation. Simply by bringing distinct groups of users together and allowing them to conduct standardized, efficient transactions with each other (and reducing costs as a result) platforms can reduce barriers to entry.
Providing options and accurate cost information helps doctors and patients make better, more informed decisions, which can lead to better health outcomes and fewer abandoned prescriptions at the pharmacy counter due to surprise costs.
In some cases, it is possible to create value for users of a platform at no cost to them at all: CoverMyMeds is a multi-sided platform that connects doctors, pharmacies and pharmacy benefit managers to improve the prior authorization process.
Now, thanks to Aledade’s platform and the technology, tools, expertise and processes it makes available to all of its users, independent physicians collectively are able to enter into risk-bearing contracts with payers (who typically have significantly larger and more sophisticated operations) with confidence.
Health care providers have typically relied on their own training and experience to treat their patients; when patient needs exceed their own expertise, however, providers seek expert second opinions.
For example, in June, 2020, the National Institutes of Health launched the National COVID Cohort Collaborative (N3C), an analytics platform that gives scientists direct, secure access to critical Covid-19 data to better understand the disease and develop targeted treatments.
For example, Aledade recruits independent physicians to become members in and lead Accountable Care Organizations (ACOs). ACOs are arrangements in which a group of providers contracts to take responsibility for the cost and quality of a population of patients.
Bring down costs by spreading them over a continually increasing number of users. Multi-sided platforms have become referred to conventionally as “winner take all” markets, in part because of network effects and the advantages they create.
Early on (between 2010 and 2015), most ACOs were led by health systems or hospitals, in part because of their experience with risk-base contracts, and also because they had the resources to invest in new technology (e. g. , population health management and analytics), tools and change management efforts.
A two-sided technology platform that sits between healthcare organizations and the various novel technologies offers each side a single, scalable, reusable connection point that has the opportunity to massively improve economic efficiency for all involved.
I have been working on the business strategy side of health technology for the past decade, and have written about health tech adoption, value, and the impact of federal policy in journals including Health Affairs, JAMIA, AJMC and others.
There is a burgeoning industry of innovative technologies now helping health care organizations increase access to care while providing more holistic, higher quality care.
Essentially, the value of the platform increases as more users come onboard – and because the platform company is able to spread a set of fixed costs over an ever increasing number of users, it gains a cost advantage over competitors.
Vericred, based in New York City, is building out a data transfer platform between health insurance carriers and digital health and “insuretech” and “benefittech” firms such as Gusto and Zenefits.
A number of factors impacting just how much value a platform ultimately delivers — including how well the platform is managed, and the various ways in which each type of platform achieves and experiences network effects, which broadly refers to the fact that the more users you have on a network, the more value that network will derive.
Digital health platforms allow different healthcare constituents directly connect and interact with …
Currently there is often a tremendous amount of information asymmetry between different constituents – think of the difference in knowledge and agency between a doctor and the average patient (one-third of whom have limited health literacy) facing a new diagnosis.
RubiconMD, for example, operates a platform that connects primary care physicians with a nationwide network of specialists for an “eConsult”.
Healthcare involves coordinating care, information, financing, and payment among a highly fragmented set of constituents (payers, employers, people, and many, many different parts of the care delivery system).
Create efficiency and reduce search times by allowing users to directly interact with each other, improving their ability to share information and reducing the need for middlemen who serve as antiquated gatekeepers.
We have examples of what this type of virtuous innovation can look like: in the fintech space, Plaid built a platform to enable standardized data transfer between financial institutions and digital applications that power various consumer needs.