“Why don’t people use digital health services?”

A few weeks ago, I was invited to meet with the CEO of one of the largest hospital systems in the south to talk about their digital health service initiatives and introduce him to Sherpaa. There were three people present in the meeting: the CEO, the CIO, and me. We talked for an hour and a half. I love these conversations, especially when the CEO has a vision and appetite to get things done. We were talking about how his system rolled out video visits with their doctors about a year prior. And then he asked me:

“Why don’t people use digital health services?”

Some people are going to say, “people DO use digital health services!” Yes, that’s true. But healthcare has been left in the dust by other industries. In just a few years, we’ve seen Facebook, Google, Uber, Amazon, etc. disrupt and own entire industries, but we have not seen anywhere near a small disruptor in healthcare. There’s simply no comparison.

For the last 11 years, I’ve been building digital health services, both in-person services augmented by digital tools (my house call practice and Hello Health) and digital health services that are human-powered, but virtual (Sherpaa). Throughout this time, I’ve also been obsessed with the industry and what’s worked and what hasn’t. It hasn’t truly taken off, despite billions of dollars invested and thousands and thousands of people spending every day of their lives building digital health tools. And, trust me, I don’t think any of us, especially myself, have cracked this nut. So, here’s my answer to him:

Ultimately, I think there’s a perfect storm in our culture driven by all the various verticals’ incentives that actually work symbiotically together to discourage digital health adoption. It has very little to do with tech. 

All of these are generalizations, so of course there are exceptions. But here goes:

Insurance doesn’t cover shiny new things.

People want their health insurance to cover everything medical. They don’t realize that insurance only pays for very conservative, traditional services or services that were hyped up as innovative 15-20 years ago. They see some cool new service and their first question is “does my insurance cover this?” They don’t realize that insurance companies are the laggards. And if insurance doesn’t cover some cool new service, potential users might then think “well it must not be any good if my insurance doesn’t even cover it.” And with rising premiums, I’m now paying $1200 per month for health insurance, so I expect my insurance to bring me more everyday value. Unlike other industries, paying more for health insurance doesn’t increase its value. 

Traditional services are “good enough,” “covered by my insurance” and the devil you know.

When you walk into an urgent care center, you know what you’re going to get and you know how to use them. It’s an upgrade from the two week wait to get into some random PCP. You think you need a Z-Pack? Great, there’s an urgent care center in your neighborhood. You just pay your co-pay and get the $300 bill later. In fact, a co-pay is just a trick to get you in and deal with the unknown costs later. If you only need care 2 or 3 times a year, this is a perfectly good enough quick fix to your problem and it only costs you $700 a year to get the twice a year quick fix.

Insurance companies have created a confusing game you can’t win so we’ve all just given up on figuring out how to be smart.

Health insurance is predicting next year’s expenses and adjusting premiums accordingly. To predict next year’s expenses, you need data. Keeping everyone’s claims within processes insurer’s control ensures the cleanest data. Even when an in-network MRI will cost you, the patient, $3,000, it’s in the insurer’s best interest to confuse you with co-pays, deductibles, and co-insurance so you don’t pay $800 in cash to an out of network imaging center. Going out of network creates messy complexity and adds to an insurer’s time and costs. The same goes for PCP visits, urgent care centers, and ERs. Co-pays, deductibles, co-insurance and not giving folks an immediate way to understand where they are in their spend nor how much something will or should cost keeps all healthcare users in the dark. This forces a learned helplessness upon people and they reluctantly enter the industry for care knowing it’s a losing battle.

The industry is viewed as technologically disabled.

It’s 2018. After filling out the same form on a clipboard over and over and then having the nurse and then the doctor re-ask the same questions from the form, our culture has learned that everyday tech, like Uber, works like magic, but their healthcare is still back in 1998. Or when someone needs to transfer their medical records from one institution to another and they get a stack of paper. Imagine Facebook sending all of your data as a stack of paper. This colors their trust and appetite to try new healthcare things.

Innovative health services are designed to fit into the traditional industry, instead of meeting actual needs people have.

A video chat with a stranger to solve one of your problems is a thing that only occurs in healthcare— and, well, porn. That’s because a video visit is just an office conversation, via video. Insurers and hospitals speak the 10 minute visit language. It’s not much of a conceptual stretch for the industry. But if everyday people wanted to video chat with strangers to solve their problems, don’t you think every single consumer-obsessed company in other industries would have been doing this for the last 10 years? And don’t you think ChatRoulette would have taken off instead of Apple’s Messages, Facebook Messenger, WhatsApp and literally all the other communication apps out there. Also, this.

Innovative health services lack usefulness and breadth

Ten minute video visits can only diagnose and treat ~30 simple conditions, but traditional PCPs and urgent care centers treat ~1,500 conditions. People have to be educated about how to use these services and what they can and can’t be used for. If they use these services incorrectly, it’s not only a letdown, it’s a fleecing. If you pay for a video visit and the doctor says you have to be seen in-person after you paid for the service, you’ll pay twice to get your problem solved. And there are far more than 30 real-life health issues.

It’s unclear how to access digital health services offered by a hospital network

Healthcare has always been hyperlocal because people don’t travel too far for care. There’s a deeply ingrained behavior to get care from your local institution or doctor.

But I’m driving around town and see all the billboards on the local highways where the local hospital network excitedly announces that “video visits are here” so I go to the hospital website and there’s no mention of it anywhere. The funnel from billboard to care is completely broken. I don’t even know where to start. Then, once I find it, how confusing is it to get care? How many clicks? How do you register? Do you have to register with the patient portal first? It’s not like downloading uber, entering your payment information, and summoning a ride. I think I’ll just take an uber to the local urgent care center instead.

Innovative health services choose, dare I say it, the “wrong” target market for massive digital health service adoption.

Innovative health services flush with VC money are often targeted at the Medicare Advantage population (Aledade, Devoted Health, etc.). Medicare folks aren’t the early adopter types, despite lots of money being invested in the space. There’s a reason why the iPhone, Uber, Facebook, and all the other fast-growing companies target early adopters. Targeting the 75 year olds with fancy new tech has very little precedent for massive adoption.

Other innovative health services with VC investments target the very small “I want to spend $1,500+ on access to a super tech savvy primary care team.”

These are companies like Forward or Parsley that offer a service at a price point way out of reach and way out of value for most everyone. This demographic is very, very tiny. The vast majority of people just don’t have that kind of money nor do they value doctors to that extent. This demographic has few ongoing health problems and mostly just have acute, urgent needs. These companies “revolutionizing primary care” are really just premium services for folks looking to spend money on anything that makes them feel like they’ve got a premium experience.

People are totally uneducated about how to spend on healthcare.

Here’s a real conversation that happens every day.

Cost-savvy doctor: “An ultrasound will only be $150 if you just pay the radiology facility directly, but it will be almost $1200 if you use your health insurance.”

Patient: “Well I think I’d rather pay the $1,200 and get credit toward my deductible.”

Unless it is a guarantee you’ll spend your deductible due to having some expensive condition, most people don’t spend their entire deductible. In that case, paying out of pocket outside of the System is shockingly more affordable. That means paying directly for your ultrasound or joining Sherpaa for $270 to get unlimited yearly primary care for a fixed price is a logical no-brainer. But healthcare is so confusing, even for very smart people, they just bend over and follow the System’s rules even though that might mean not going on vacation for a few years.

The traditional players (both insurers and hospital systems) pay lip service to innovation, but actually antagonize it.

There’s a lot of money in the status quo. Why break it? Especially when shareholders expect more value. So, they have three year sales conversations and then decide against innovation and finally land on paying millions to purchase the software that powers video visits that nobody uses, mostly because, again, the customer engagement funnel is broken. Not to go all conspiracy theory on anyone, but that funnel might be intentionally broken. The world is littered with 2002-level patient portals and video visit services with cobwebs and crickets. But there’s 20% of our nation’s GDP flowing through all the traditional office visits and procedures.

And, finally, potential customer awareness is severely lacking.

If the average person needs a health service 2 to 3 times a year, it’s hard to get the awareness timing right. Google ads are great for “I think I need antibiotics for a UTI.” Facebook is decent for reminding folks that your health service exists. And, the holy grail of your friend hyping up this new digital health service they tried is the holy grail, but that’s a slow, organic growth in a population with infrequent need (and this type of growth doesn’t fit in well to the Snapchat-level hyper-growth VC’s want to support). A potential patient may come across a really helpful innovative digital health service while perusing the internet, but at the time they become aware, they’re not in need. Then, it’s a matter of how sticky that service is in the mind of the potential customer. In six months, are they going to remember the name of the service? Healthcare is notoriously unsexy and uncool and good, memorable, sticky advertising for a very infrequent need is extremely hard.

The jobs consumers hire health tech for solves a tiny sliver of their problems and they’re all disconnected and not talking to each other nor looping in a professional.

“I need to feel better fast” is by far the most common problem early adopters have. In the under-50 early adopter category, they have more acute rather than chronic issues. The kinds of issues they have look more like pediatrics than geriatrics. But “feeling better fast” still to this day requires an in-person visit for the vast majority of things because the breadth and scope of today’s most well-known digital health services (video visits) are so limited. The innovation for this common problem is “book an appointment online” (ZocDoc). Once the appointment is booked, and they show up at the doctor’s office, a consumer still faces a litany of old-fashioned nonsense. Online booking is just one tiny solution for a much bigger set of problems. My app to view my test results is a totally separate app from my app to get a refill on my medication or my app to help manage my asthma…and a doctor can’t see any of the data or activity.     

Notice none of these reasons have anything to do with an app’s features or tech design.

It’s not a shortage of ideas nor is it a shortage of digital health apps or the funding they receive. We’re a few months shy of the 10th anniversary of the Apple App Store— there’s been plenty of time to revolutionize all the other industries. It’s truly about the structure and financial incentives found in our healthcare “System.” It reminds me a bit of how the music industry reacted to Napster. They sabotaged the free movement of music. Finally, over a decade later, Spotify and Apple Music appeared and now it’s all easy and you don’t have to think about it. I assume the same thing will eventually happen in healthcare. But the Napster of healthcare is nowhere to be found. And if Napster hasn’t yet appeared, the Spotify and Apple Music of healthcare is quite a long way off. Hopefully that’ll happen soon.

Triage for today

When you visit google.com, there’s a big free text box encouraging you to use their core feature, search. For one of the world’s largest companies, it’s a refreshingly simple almost blank white page. That’s because they know what role they play in the world. That page is the entry point to organizing the world’s information. Search is a tool to solve a problem, just as doctors are tools to solve problems.

What is the entry point into healthcare? If you ask healthcare folks, it’s “call up and make an appointment.” In other words, give a local PCP $200 and they may or may not help you. There’s a good chance, due to their busy schedule, they’ll just refer you to a specialist because PCPs just don’t have the time to deal with you.

The entry point into healthcare needs to be free and an intelligent service that either solves your problem virtually or directs you to exactly the level of service and who and what you need. Google gave search away and grew into, well, a couple hundred billion dollar verb. Healthcare needs to do the same thing. The entry point into healthcare needs to be a free human-powered, tech-enabled care and triage service.

Telehealth isn’t living up to any sort of hype.

I’ve been having lots of conversations lately with brokers, employers & health plans who finally realize that 10 min telehealth visits aren’t living up to the hype. Also, word is Teladoc is pressuring plans & brokers to increase their monthly fees paid by the group on top of the per use fees.

Instead of a solution like Teladoc and the clones who can only diagnose ~30 simple things like pink eye, I think folks are realizing that the combination of Virtual Primary Care and Direct Primary Care is the most effective way forward. VPC for the 70% of daily health issues (~1,500 conditions) that don’t need an in-person visit and DPC for the more complicated folks who would get value from an ongoing in-person relationship with a PCP.

The tyranny of the appointment

Forcing doctors and patients to communicate and problem solve within defined time slots forces a series of bad practices. A health issue is like anything in life. They have a beginning, a middle, and, ideally, a resolution. People need support, feedback given, and questions answered in all phases. Sometimes it’s a quick question, comment, or clarification around something weird or how to take their medication properly. But an appointment, whether that happens in a costly office visit or a real-time video visit, is just one 10 minute snippet in time. If we had the opportunity to blow up the concept of an appointment, and allow doctors and patients to communicate normally like we all do nowadays, diseases would be managed markedly differently. Doctors wouldn’t be forced to make split-second decisions (even guesses) around a diagnosis and how to manage it, and management could be far more conservative and less invasive. If, when I’m working with a patient and I’m on the fence about whether or not this is bacterial or viral and therefore may or may not need antibiotics, if I could just check-in quickly and easily with a patient over the next hours or days, I could choose a far more conservative route. This is just one example of many more.

Maintaining complexity, without adding value.

One day, you wake up and look around and see that 90% of everything around you is there to maintain complexity, and not add value. That’s my definition of medicalcare in America. A new study published today in JAMA looks at healthcare spending in America and concludes:

Prices of labor and goods, including pharmaceuticals and devices, and administrative costs appeared to be the main drivers of the differences in spending.

Meanwhile, the medicalcare industry led all other industries in new employment and added 300,000 new jobs in 2017. As an industry, we need to focus on adding value, not adding jobs. I’m afraid, with today’s mandated health insurance complexities, this isn’t possible. That’s why incumbents won’t and can’t save us. Any new innovation will come from left field. And those innovations will strictly focus on 21st Century efficiencies that increase value and destroy complexity. But, in order to get there, it’s going to take a coalition of small and medium-sized players willing to think differently and invest their healthcare dollars in the future, not propping up the past.

Can innovation in healthcare do more harm than good?

Sure, here’s how. Say there’s a new thing called “video visit for 10 minutes with a random doctor.” A 10-minute random doctor conversation (without the ability to follow-up or order tests to confirm suspicions) is, by design, a tool to solve an extremely simple problem, like pink eye. This innovation depends on users understanding how and why they can use the tool. If the user believes this tool is far more capable than it is, they’ll pay for a tool that can’t help them. And then they’ll pay again for the more traditional tool (like an urgent care visit) that can finally help them. The “innovative tool” is just part of the equation. By far, the most important part of an innovation is educating people how to use the tool. Unfortunately, many of these video visit companies market to users “talk with a doctor now” vs. “talk with a doctor for super simple things like pink eye now.” They make money from users misunderstanding and misusing the service and can ultimately increase the cost of care when not used appropriately. Talking with a doctor for 10 minutes via video is kinda cool, but it’s a rock to use in a pinch, not a Swiss Army knife.

Magic doesn’t make health happen.

Last week, I wrote about the difference between “health” and “medical.” Basically, “health” is a series of everyday choices and “medical” is pills and scalpels. The concepts are wildly different. But I get it, the medical world wants to prolong and/or return you to a state where you can make the same everyday choices. Helping you make different/better everyday choices really isn’t medical’s expertise. Here’s what I think is even crazier. The health world makes more money by raising your awareness of those everyday choices. The medical world makes more money from people who ignore everyday choices. They are diametrically opposed. The healthier the population, the less medical makes. Don’t get me wrong, I don’t think there’s some grand conspiracy amongst doctors and hospitals to keep us suffering. But if there’s any way forward out of this mess (and I mean 20-30 years from now), the health and medical worlds must collide and figure out a sustainable, national business model that leverages one another’s skills and profits off health, not sickness. That has to start with today’s medical educators preparing today’s medical students for a brand new business model of the future. That’s exciting to think about, but magic doesn’t make things happen.