NEW YORK (MainStreet) — The health care industry in America is a labyrinth of bureaucracy, paperwork and old institutions that don't really make sense anymore. In an age where we can order takeout with the tap of a button and deposit checks with a simple photograph, it can seem a little absurd that insurance companies still do business by fax and that we have limited transparency into the system responsible for keeping us healthy.
Data is changing all that.
As the Internet revolutionizes virtually every industry and the Affordable Care Act creaks into gear, patients are settling into the role of consumers, said Sharon Begley, Senior Health and Science Correspondent at Reuters, at the recent Internet Week 2014 in New York City.
"When I traveled to Europe in college, the critique I always heard about America is that we're so consumerist," said Brandon Hull, cofounder and managing partner of Cardinal Partners, a medical and life sciences venture capital firm. "But I've noticed that this remarkable pattern in consumer behavior that built our economy is absolutely absent in health care . . . the legacy healthcare system has infantilized the patient. We have nothing to say on the treatments we get or health care decisions. This dawning awareness [on the part of the consumer] is one of the most interesting things about this moment."
Industry and Consumers: Both Flying Blind
On one hand, policymakers often don't have the whole story, because they have the tendency to make decisions in the absence of stakeholders. John de Souza, CEO of MedHelp, described attending a recent industry meeting all about patient care but found no patients in attendance.
"If you want to get families involved, you need to speak to mothers," he said, "but there was only one woman in the room. We were thinking about Hispanic populations and African Americans, but none were in the room. The good news is, I think, for once, the technology is there to bridge the gap. With tech we can learn enough about ourselves to make smart decisions."
On the other hand, patients lack information on the relative pricing of their health choices. Mitch Rothschild, CEO of Vitals, said: "I was on the phone yesterday with a gentleman who runs surgery centers. These provide equal or better care as hospitals at about a third of the price, but it doesn't make a difference in whether people go to him or not, because they don't know that he's cheaper or as good."
Information and transparency in the industry could change that and allow consumers -- patients who need care -- to make more intelligent choices.
Particularly as high-deductible plans explode in popularity, Rothschild predicts that more consumers will become interested in the cost-benefit relationship of their care options and how to spend more intelligently.
Why Data Is Key
All of us weight certain factors when deciding whether to buy anything—quality, cost and availability.
"How can you possibly have a marketplace where there's no information on price or quality?" Hull asked.
Finally, changes are within sight, as the Internet and consumer ratings sites have drastically increased the health information available to us, ranging from user reviews to statistics from the government about real patient outcomes.
It's natural — and good — for different customers to emphasize various metrics in different situations, says Rothschild. Social proof is most important when it comes to doctors you interface with regularly and directly, he says, like pediatricians and general practitioners. "That's when you talk to friends [or read online reviews]," he said. "When it comes to a surgeon, what you want is the outcome . . . that's more empirically based. We care less about [patient interaction] and more how the surgeon actually performed."
Jeff Cutler, executive vice president at Vitals adds, "Everything we buy and every decision we make comes down to our own personal tradeoff of quality, cost and availability . . . for certain people cost is more important and to others quality is most important."
The online revolution isn't just about review sites. It's about data.
For the first time, we have access to Medicare information on how much providers are being paid for certain procedures, including which doctors are doing a lot of procedures that have been flagged as being performed in excess without better outcomes, Begley said.
"To me . . . this indicates which doctors are getting the message and which are trying to adhere to outcomes-based decision-making," he said.
The Cost-Benefit Equation
A few years ago, the Internet provided information on quality, but not cost. In the last year, Rothschild says, health plans have begun sharing the cost part of the equation, too, by informing patients about the cost of a visit or procedure before they go to a doctor, rather than simply surprising them with an explanation of benefits later.
"This whole subject has micro- and macroeconomic implications," Hull said. On a micro level, releasing Medicare data can help consumers focus on which doctors are most up-to-date and infuse a cost-conscious sensibility to the decision, but it misses a grander question: beyond who will perform the procedure, which higher-level approach does the patient wish to follow?
"It focuses on granular elements of pricing of certain prescribed procedures," Hull said. "That's symptomatic of the old healthcare economy of proscriptive and demanding control."
Hull envisions a future in which a patient isn't just price-shopping for the best orthopedic surgeon to fix his rotator cuff, but also "maybe considering noninvasive procedures to give better outcomes that don't involve surgery."
A surgeon can sketch out the prices for surgical options and a physical therapist can lay out therapeutic choices, but generally each will advocate for his own medical approach. One route may be more expensive, the other may take more time and the effectiveness of each may depend on who you talk to. Those priorities will depend on the patient's desires, but by making treatment data available, patients will be able to better sort out their options and make informed decisions.
"The whole goal is to take complex data sets and make them simple," said Rothschild. "If you hurt your knee, you can have surgery, go to rehab or take a cortisone shot. Why is it we as Americans do not know that of those who hurt their knees, how many have done each of those treatments and what are the outcomes? . . . That would give us the ability to decide between treatment alternatives as we become more in control of our own health." Transparency throughout the system will naturally phase out bad actors or "those who are not good or are insensitive to the cost-to-quality ratio," he said. "Once you have a market economy, it's like flu shots. We used to all get them at the doctor's office, but now it's clear that we can get an equal-quality flu shot at Walgreens or CVS at a fraction of the price, so consumers have been migrating."
Some bystanders may hesitate to overemphasize cost, lest consumers make poor health decisions predicated solely on pricing, but Hull contends that consumers understand their own incentive to make the best decisions for their bodies, not just their wallets. The system is still fresh and surely there will be hiccups, but the Internet is less of a free-for-all than we might imagine, and we've become very good at sifting through the noise and regulating the negative forces. Hull said, "We're now 12 to 13 years into social networking and online forums, and we see interesting self-governance and self-correcting."
Given how much change has already occurred since the Affordable Care Act first began to take hold, and since tech and healthcare started to intermingle in fascinating ways, the rate of change is sure to keep accelerating in future years. If these trends continue, the change won't just take the form of new technologies, but an actual shifting of the way Americans conceptualize healthcare.
--Written by Allison Kade for MainStreet