Tag Archives: Digital Health

Healthcare Leader Should Embrace APIs

Originally published in Healthcare Information Management and Communications Canada magazine:

Despite their technical sounding name, Application Programming Interfaces (APIs) are a strategic weapon that can drive innovation, foster interoperability, and unlock the value of existing information systems. Just as leaders in industries as diverse as retail and finance have embraced APIs as a strategic imperative, so too should Healthcare leaders. 

Over the summer I had the perfect opportunity to pitch the benefits of APIs to a hospital leadership team and I blew it! I was interviewing to fill a vacancy on the leadership team and had been asked (as had the other candidates) to prepare a presentation on how the organization could optimize use of their recently deployed hospital information system replacement. APIs were part of my response. 

While many aspects of my presentation elicited nods and smiles, the mere mention of APIs was met with quizzical looks that quickly morphed into the dreaded “eyes glazed over” expression. I knew that I had failed to clearly explain APIs and why they matter when the CEO asked, “So, what exactly is an API?” 

As I am firm believer in the old adage, “if you at first you don’t succeed, try, try again”, I’m taking another run at convincing healthcare leaders to embrace APIs. 

The U.S. Office of the National Coordinator for Health Information Technology (ONC) describes APIs as “messengers or translators that work behind the scenes to help software programs communicate with one another.” APIs “describe a specific set of technical instructions that allow one piece of software to interact with another piece of software.” 

An October 2015 article in Forbes entitled Why Your CEO And Board Should Be Demanding API Adoption, asserts: 

“Given the benefits that companies of all sizes in a diverse collection of industries are getting from APIs, it is clear now that more CEOs and Boards of Directors should be delivering their own version of the Yegge rant.” (Written by Steve Yegge, formerly with Google, the rant includes a leaked communication from Amazon CEO Jeff Bezos in which he demanded that everyone at Amazon implement APIs or be fired). 

In a companion article entitled Don’t Get Ubered: APIs Hold Key To Digital Transformation, author Dan Woods argues: 

“In a larger sense, APIs are the secret sauce to becoming digital, that is, to transforming business so that innovation can happen at a faster pace, so that barriers to change are reduced, so that many more people can contribute to your company’s success, and so that you can create better products and defend yourself from the competition.” 

Robert S. Huckman, faculty chair of the Harvard Business School Health Care Initiative, and Maya Uppaluru, a policy advisor in the Obama administration’s White House Office of Science and Technology Policy, share Dan Wood’s views on the benefits of API. In a December 2015 Harvard Business Review article entitled “The Untapped Potential of Health Care APIs”, they assert: 

“If the health care industry followed suit, the impact on the quality and cost of care, the patient’s experience, and innovation could be enormous.” 

Many industries have embraced APIs. According ProgrammableWeb, Reference, Financial and Social are the leading users. The health sector, unfortunately, does not make the top ten on the ProgrammableWeb list. 

A Commonwealth Fund healthcare policy and practice commentary entitled “Making Health Data Useful to Patients Through Open APIs” puts the current use of APIs by the health into perspective: 

“APIs have the potential to remove many barriers to the sharing of health information between providers, patients, and others but they are fairly new to health care.” 

The ONC has recognized the transformative potential of APIs and views them as the means to overcome the interoperability challenge that has plagued the health sector. Certification criteria for electronic health record systems include reference to APIs. Since the majority of hospital information systems used in Canadian hospitals are from U.S. vendors, these hospitals can potentially leverage these same APIs. 

The Ontario Hospital Information System (HIS) Renewal Secretariat shares the ONC’s views on the transformative potential of APIs and has included API support as a core requirement that must be incorporated into Master Service Agreements and RFPs. Specifically, with respect to Data Access and Portability, the HIS Renewal Provincial Framework (draft) specifies that an HIS must “support access to the hospitals’ data by other health care solutions including through the use of published APIs.” 

The Harvard Business Review article that I referenced earlier describes the benefits of APIs for patients, healthcare providers, and researchers. With respect to optimizing use of hospital information systems (the topic I was asked to address in my interview), the article explains: 

For providers, who often report difficulty with using EHR technology, APIs represent an opportunity for internal innovation. Open APIs can allow provider systems to build their own custom user interfaces in-house or shop around for a better solution than the interface that comes standard with their EHR system. EHRs could eventually become a platform on top of which other companies could build more tailored applications and improve usability for clinicians. 

What are your thoughts on the strategic importance of APIs? Are they strategic a strategic imperative that healthcare leaders, including CEOs, should embrace? 

Mike

 

Guest Blog: The hidden cost of healthcare IT

Fellow blogger Tim Wilson recently mused about the true cost of deploying new health information systems.   I asked Tim if I could share these musings with my readers on the eHealthMusings blog.  He graciously agreed.
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When analysts assess the material benefits associated with digital health, they’re happy to crunch numbers that reveal the overall savings that electronic health information systems (HIS) deliver to the bottom line.

But there’s a hidden cost to HIS that’s often overlooked, and it’s related to security and privacy. Although digital systems can be made more secure than the old lock-and-key filing cabinets, they also add immense risk. We all know why: With a digital system, a breach can result in access to immense volumes of personal healthcare data.

To protect ourselves, we need to increase spending in two key areas: IT security and privacy training. Unfortunately, that’s not happening. Why? Because these added cost aren’t associated with improved system efficiencies and healthcare outcomes.

IT security is understood to be a critical concern in healthcare, but is cybersecurity spending keeping up? Well, no. According to Juniper Research, cross-organizational cybersecurity spend is expected to increase by an average of 9% per annum. Canada’s hospitals aren’t seeing that kind of growth in targeted IT spend for cybersecurity. A typical hospital CIO would no doubt say that—barring a specific initiative or rollout—a 9% budget increase year-over-year is excessive in any one IT area, security included.

And that CIO might have a point, because the big privacy breaches in hospitals often center on human activity, and not a technological failure. A recent study by U.S.-based cybersecurity software company Protenus found that insiders were responsible for 31% of the total number of healthcare breaches, and that almost 30% of privacy violations were repeat offenders.

The followup to that would naturally be to ask what the budgets are for workforce training on privacy. You can be sure of two things: those budgets are very low, and they also aren’t growing at 9% a year.

The answer is to maintain constant investment in both areas, and for the initiatives to be inter-related. But for that to happen there has to be a broad cultural shift that’s reflected in more rigorous legislation. The European Union’s General Data Protection Regulation (GDPR) requires privacy breach notification within 72 hours—far beyond the requirements of Canada’s Personal Information Protection and Electronic Documents Act (PIPEDA).

With a more significant legal deterrent, one could argue that healthcare privacy training with organizations would be more effective, thus reducing the cost burden. As it stands, in Canada the legal repercussions for privacy breaches are minimal. A nurse in Alberta who was recently caught snooping on two individuals—she illegally accessed their health information 138 times over a three year period—was fined $3,000. She kept her job, and was ordered to take some “remedial privacy training.”

Back in May, a nurse at Grace Hospital in Winnipeg accessed emergency room data on hundreds of individuals. The motive, apparently, was “personal curiosity.” The nurse lost her job. End of story.

More recently, in June CarePartners in Ontario was hacked. The criminals claimed they had hundreds of thousands of patient records and related materials dating back to 2010. If CarePartners were to be found guilty of not properly safeguarding the data, as an organization they could be fined up to $500,000 (individuals max out at $100,000).

It’s extremely unlikely that CarePartners will be fined. And maybe that’s okay, because a fine is not necessarily the best approach. Instead, CarePartners could be ordered by the courts to commit to permanent and ongoing investments in improved security and training. (This would be far more rigorous than their current “Privacy Pledge” and the requirement that their workers sign a “Pledge of Confidentiality.”)

The three stories mentioned above have one thing in common: it wasn’t the healthcare organizations’ internal processes that figured out what was going on. In the case of Alberta, the problem was discovered because two patients requested access to their audit logs. At the Grace Hospital in Winnipeg, it was a manager who caught on to the inappropriate behaviour, and reported it. And at CarePartners, it was the criminals themselves who blew the lid on things, even contacting the media.

Which brings us to the necessary conclusion that there are a lot of digital health system breaches that aren’t being found in regular audits. Sadly, this has allowed for the laissez-faire attitude to continue. That serves CIOs, because it means they can keep a hold on their cybersecurity technology and training costs, while also maintaining or increasing investments in priority “high reward” areas that directly relate to improved system efficiencies and patient outcomes.

According to Juniper Research, over 33 billion records will be stolen by cybercriminals in 2023, an increase of 175% over the 12 billion compromised this year. A lot of those 146 billion records will be in healthcare. Among those that will be in Canada, rest assured that many will fly below the radar. The result is that the depth of the problem will be obscured, and the response won’t be as serious as it should be.

Ask yourself: are the training requirements in your organization for security and privacy becoming more rigorous? Is the training an ongoing, and recurrent phenomenon, designed to maintain awareness, or is it a one-off?

My guess is that your healthcare organization’s cybersecurity budget is an annual line item that, as a percentage of overall spend, is well below the steady increases in the overall threat level—unless a specific project is being funded. My guess too is that training is a one-time affair. You’ll see lots of signs reminding people to wash their hands. You won’t see many advisories reminding digital health workers to respect patient privacy.

Around the world, cybersecurity breaches are expected to result in over 146 billion records being stolen by 2023. The number of records breached annually will nearly triple over the next 5 years. And unless someone does something about the poor training and oversight, the situation will only get worse. The Protenus report stated clearly that “health systems accumulate risk that compounds over time if proper reporting and education do not occur.”

This is happening now in Canada’s hospitals and clinics, and without better training and stricter oversight it’s only going to get worse. The solution requires leadership and investment akin to how we approach hospital infection and safety. Imagine having a ward with a notice in a hallway bragging about the numbers of days since the last privacy breach. Imagine if privacy were understood to be part of the “continuum of care”—a reasonable idea, given the psychological and emotional damage that breaches cause patients.

It’s time for an honest discussion about what this kind of commitment will cost. Once that’s understood, it can be baked into budgets, and not treated as ad hoc spending, or addressed in a reactive basis after a crisis. Only that way can we keep Canadians as safe as possible from data breaches.

 

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Tim Wilson is principal of T Wilson Associates. Follow him on Twitter: @TimothyEWilson

Guest Blog: Are we getting value from our healthcare technology?

A recent article by Tim Wilson caught my attention and I asked Tim if I could share it wiht my readers on the eHealthMusings blog.  He graciously agreed.
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The Council of Academic Hospitals of Ontario (CAHO) recently launched a new tool to help hospitals pull innovation into Ontario’s healthcare system. The tool is actually a quick reference guide titled “The Art of the Possible,” which exposes 16 myths with regard to public sector procurement in Ontario. The idea is that awareness of these myths will then help bring innovation into the system faster, while also improving patient care and health system efficiency.

It’s a reasonable idea, but it’s also debatable to what extent a 19-page reference guide can function as a strategic tool for improved procurement practices. Instead, it’s more of a handy factsheet. The guide itself, which was developed by a small panel of experts, claims to be of use for hospital executives and for individuals with intermediate to advanced knowledge of procurement. However, I can see how it would also be helpful for vendors who are either new to the market or considering entering into it.

The rationale for the reference guide was a 2016 survey across CAHO’s membership of Ontario’s 23 academic research hospitals, in which 76% of respondents identified “policies, directives and procurement rules as major hurdles to innovation adoption within their organizations.”

That isn’t surprising. What is surprising—to me at least—is that in setting out to expose the myths, CAHO is in effect saying that the barriers to innovation have more to do with a series of misunderstandings, as opposed to real structural problems.

The first myth tackled in the guide, and of course a real bugaboo in the discussion of value and innovation, is the notion that organizations must pick the lowest cost option in order to be consistent with the “value for money” principle in Ontario’s Broader Public Sector Procurement Directive.

The guide points out that value for money is to be assessed alongside accountability, transparency, quality service delivery and process standardization. And value for money itself can include other factors, such as the qualifications and experiences of the supplier.

The second myth is that organizations are stuck with traditional procurement models. In fact, the directive permits a variety of approaches as long as the approach is “fair, open and transparent and in compliance to the organization’s procurement-related trade obligations.” What that means is that negotiated requests for proposals (RFPs)—including with outcomes-based specifications—as well as competitive dialogue, innovation partnership, reverse auctions, and best and final offer, are all allowed.

Another myth is that the directive is inflexible; not true—as long as the procurement process is transparent, there are ways to build in flexibility. And organizations needn’t always go to market, given that non-competitive procurement processes are allowed in specific circumstances. The guide also asserts that the directive isn’t overtly bureaucratic nor is it only a “guideline”—compliance is required by law.

There are plenty of myths around vendor engagement, too. For example, you’re allowed to talk to vendors about unsolicited proposals outside of the procurement process, and RFPs can include opportunities for alternative proposals. Importantly, the guide clarifies that requests for information (RFIs) and requests for expressions of interest (RFEIs) can’t be used to prequalify or shortlist vendors. That said, there is some wriggle room with regard to conflict of interest, which is worth knowing given how small the community is in Canada.

In the sometimes rarefied world of hospital procurement, the guide confirms that advance contract award notice (ACAN) is permitted when no other vendors can provide the good or service, or meet related conditions. And you can still negotiate with vendors if desired, so long as that intent is covered in the RFP. Before the procurement process is initiated there is also plenty of legitimate opportunity for market engagement.

With regard to intellectual property, all IP issues needn’t be resolved to start a pilot, though they should always be taken into consideration. As well, an open process may not be required for a pilot. It could kick in if you then move to actual procurement, but co-development may not always require you to go to market. To help with this, organizations can consider engaging a fairness adviser.

That summation of the 16 myths is a lot to digest, and the guide does an admirable job of setting the record straight. It’s a bit of an overstatement, however, to say that it offers any deep strategic advice. That said, as panel member and procurement expert Sarah Friesen has noted, the guide “will increase confidence in exploring innovation procurement opportunities,” which in itself is a worthwhile goal. To some extent, the guide helps flesh out CAHO’s role as an innovation broker with the office of the chief health innovation Strategist.

Where I see the “The Art of the Possible” having an important—and perhaps unforeseen—role is in the vendor community. Brian Mackie, co-chair of CAHO’s Innovation Broker Task Force and vice-president of finance and chief financial officer at Baycrest Health Sciences, has said that “this work is helping us pull new technologies into our hospitals faster.” If that’s true, then healthcare tech innovators will be thrilled with this shift in focus.

But they may be wary, as well. There’s much in the document that suggests Canada—or in this specific example, Ontario—can move beyond a pre-commercial test-market, with wave after wave of small-scale pilots, and little transformation when it comes to using procurement as a tool of innovation. Still, we remain in a zero-sum environment, in which stakeholders compete for limited budgets, and in which administrators are pressured to satisfy numerous disparate interests.

In these environments, no matter what method or scorecard system you use, there is often a temptation for the final decision-making to default to arbitrary, executive-level preferences for purchases that keep as many people happy while solving as many urgent problems as possible—often in limited timeframes. In these scenarios, the emphasis is on keeping the ship afloat as opposed to embarking on longer voyages that embrace at times nebulous concepts of “innovation” and “value.”

Here is where it might be helpful to have a larger strategic discussion with regard to how to make decision-making objective and autonomous, and what we really mean by “transparency.” We don’t really have full public transparency and accountability on how individual organizations allocate budgets, or to what extent final procurement decisions off of RFPs are autonomous from administrative interference. A strategic approach to dealing with the political reality of budget-conscious decision-making, the real size of opportunistic shadow spending, and the positive role that the vendor community can play, could help bring about the cultural shift needed to get the best technology into our hospitals.

 

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Tim Wilson is principal of T Wilson Associates. Follow him on Twitter: @TimothyEWilson

What Do Patients Want?

Originally published in Health Information Management and Communications Canada magazine

Wednesday night is date night. Every Wednesday after work my wife and I walk to a nearby restaurant and enjoy a tasty meal and a lively chat. While this weekly event is not particularly noteworthy – many couples do the same – our topic of conversation is perhaps less common. Each week, for most of the meal, we explore the question: “What do patients want?” 

About 12 years ago Tracy was diagnosed with rheumatoid arthritis. Her life was dramatically and forever changed. 

Rheumatoid arthritis (RA) is an autoimmune disease. Tracy’s own immune system is attacking her joints, tendons, ligaments, bones, and muscles as though they were intruders. In addition, the medication she is taking to combat her RA leaves her vulnerable to viral and bacterial infections. Not a month goes by that Tracy is not battling a cold or some form of flu-like infection. 

A former technology executive and aspiring writer, Tracy decided a little over a year ago to use her communication skills and marketing experience to “speak for those whose voices are not quite loud enough and to provide perspective to those who want to listen.” 

Tracy’s first initiative is a blog entitled simply “This is my life” in which she offers a chronic disease patient’s perspective on a variety of topics. Not surprisingly, given my social media presence and professional focus on the health sector, I took an interest in Tracy’s work and she, in turn, solicited my input. 

As Tracy’s caregiver I am party to and, in some cases, an active participant in the patient experiences that influence her writing. This shared experience has transformed what started as basic mentoring into an active collaboration to explore and articulate the patient perspective. 

One of the early topics that Tracy and I explored was the patient perspective on digital health. Although she led and eventually sold an early Internet start-up and has edited all my published work, Tracy keeps telling me that she doesn’t understand what the term “digital health” means. 

As a digital health advocate, I was more than a little surprised to hear that Tracy doesn’t get “digital health.” The more I looked at the matter from a patient’s perspective and really thought about the words “digital” and “health”, I realized that her confusion might be warranted. 

In an April 2018 Forbes CommunityVoice™ post, cardiologist and engineer Dr. Joseph Smith succinctly captures my emerging views: 

“Disease processes rely on underlying complex biological, biochemical and neurological constituents that vary with time, temperature and myriad other continuous (read: analog) variables.” 

In other words, health is analog, not digital and the term “digital health” may be an oxymoron. At the very least, the term does not seem to resonate with patients. 

So, what do patients want? 

To prepare for their May 2017 annual gathering, the Council of Accountable Physician Practices (CAPP) sponsored focus groups across the country to compare patient and physician perceptions about what is most valuable in healthcare delivery. 

According to a June 2017 article by Dr. Robert Pearl, author of the bestselling book “Mistreated: Why We Think We’re Getting Good Healthcare—And Why We’re Usually Wrong,” the top three themes for both patients AND physicians cited in the focus groups were: 

1. Doctor-patient relationship 

2. Evidence-based medical treatment 

3. Care coordination 

Dr. Pearl notes that “neither patients nor doctors saw technology, including the electronic health record and online tools for patient engagement, as particularly important.” 

A U.K. National Health System survey of 200 patients in Buckinghamshire offers further insight into the nature of the relationship that patients want with their healthcare providers: 

To be informed clearly about their choices. 

To be listened to. 

To have their questions about their health answered. 

To take an active role in their healthcare decisions. 

To be treated with respect, empathy and compassion. 

If the phrase “digital health” doesn’t resonate with patients and technology is not viewed as particularly important, does technology have a role to play in the health sector? 

A McKinsey & Company report entitled “Healthcare’s digital future” contends that technology does have a role but notes that patients have been slow to adopt digital services because “existing services don’t meet their needs or because they are of poor quality.” 

The report further suggests that too much emphasis is placed on innovation when what patients really want is quite basic: “efficiency, better access to information, integration with other channels, and the availability of a real person if the digital service doesn’t give them what they need.” 

If I have learned nothing else as a caregiver it is that patients want to be heard, that they want people to really listen to what they have to say. They are willing to tell us what they want…we just need to engage them in conversation. 

You can check out my wife Tracy’s blog offering a patient’s perspective at themadnessmaven.ca

Who’s afraid of bots?

My Dad is the classic late adopter.He waits until a technology is mainstream and nearly everyone around him is using it before he adopts. Giventhat he now owns and uses a computer, an iPad and, most recently, an iPhone, I have started to wonder what computing technology will emerge that is equally transformative.

A recent Business Insider article claims that the computer industry moves in waves, with a “convergence of favorable economics and technical advances” driving a new wave every 10 to 15 years. I witnessed three of these waves, starting with what the Business Insider article refers to as the “PC revolution” in the 1980’s. This revolution spawned companies such as Apple and Microsoft and challenged established computer companies such as IBM.

The second wave of technological change began in 1990’s when the Internet moved from the universities and research institutes into the mainstream. Fueled by an established base of personal computers and the advent of the world wide web, Internet use exploded during the late 1990’s. This ubiquitous and inexpensive communications platform disrupted many industries, particularly those that relied on physical media that could be easily digitized or physical points of presence for the distribution of goods and services.

Over the past decade advances in miniaturization and wireless communication technologies transformed computing and Internet access from activities that could only take place in select locations to ones that take place anywhere, anytime. This third wave of computing, one often referred to as the “mobile revolution”, has quickly become an integral part of our lives.

The next wave of computing will take advantage of the infrastructure established during the first three waves along with the large, established base of users who, like my Dad, own at least one computing device and who access the Internet through these devices on a daily basis.

According to Vinod Khosla, Sun Microsystems co-founder, “there have been and will continue to be multiple big technology revolutions, but the most impactful on human society may be the one that finally builds systems with judgment and decision-making capability more sophisticated and nuanced than trained human judgment.”

While Mr. Khosla conceded in a November 2014 Forbes editorial that “any one software program may not do everything a human brain can do, he asserts:

“Specialized programs will likely makedecisions and predictions in their domain better than most trained humans. Many, if not most, domains will be well covered bysuch programs.”

Dr. Bertalan Mesko, the Medical Futurist, offers a similar perspective in a recent blog post, noting that while “we have not yet reached the state of ‘real’ AI (artificial intelligence)” … it is ready to sneak into our lives without any great announcement or fanfare.”

As an example of what is possible, Dr. Mesko cites a British application that helps people appeal parking tickets. This application successfully appealed 64% of quarter million parking tickets in both London and New York.

No one term seems to have emerged for this next technological wave. Some analystshave referred to it as “machine learning”while others use terms such as “artificial intelligence”. The Business Insider article to which I referred earlier notes that “none of these terms capture how widespread and roundbreaking this revolution will be” and suggests the term “robot revolution” is more appropriate. According to this article, the robot revolution will be “characterized by dozens of devices working on your behalf, invisibly, all the time, to make yourmife more convenient.”

In a blog post on the Medical Futurist website entitled “Artificial Intelligence Will  Redesign Healthcare”, Dr. Bertalan Mesko notes this next wave of computing “could organize patient routes or treatment plans better, and also provide physicians with literally all the information they need to make a good decision.” Several examples cited in the blog post include:

  • Google Deepmind Health project that is using artificial intelligence to mine the data in patient medical records to provide better and faster health services. In its initial phase, Google is working with the Moorfields Eye Hospital NHS Foundation Trust to improve eye treatment.
  • IBM is applying its Watson artificial intelligence technology to identify the most appropriate cancer treatment plans for a patient. Watson for Oncology analyzes the meaning and context of structured and unstructured data in clinical notes and reports, and combines the insight gleaned from this analysis with attributes from the patient’s file as well as clinical expertise and external research.
  • Babylon, a British online medical consultation and health service, launched an application which offers a medical artificial intelligence consultation based on personal medical history and common medical knowledge. The recently launched application checks user reported symptoms against a database of diseases using speech recognition. After taking into account the patient’s history and circumstances, Babylon offers an appropriate course of action.

Not everyone enthusiastically embraces the promise of this next wave of computing. Vinod Khosla suggests that machine learning technologies might surpass humans in both intelligence and knowledge relevant to perform a particular job, thereby rendering human employees unnecessary. Mr. Khosla worries that “the machine learning technology revolution will lead to increasing income disparity, and disparity beyond a certain point will lead to social unrest.”

Others such as noted physicist Stephen Hawking and Tesla Motors founder Elon Musk fear that the artificial intelligence technology will become so sophisticated that it will try to take over our lives. An unabashed technology booster, I must confess that the implications of this next technology wave has given me pause to reconsider my position. Perhaps,as the Medical FuturistS suggests, we need to create ethical standards and consider gradual development of this next technological wave.

Do you agree that the “robot revolution” is the next wave in computing? If so, do you have any concerns about its impact? Please share your thoughts with me at michael.martineau@avenant.ca or on my blog at ehealthmusings.ca

Digital Disruption … Is Healthcare Next?

The following article was recently published in Healthcare Information Management & Communications Canada, the journal for COACH members:

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As many industries have discovered, often painfully, digital technologies can be disruptive.  Just ask Blockbuster, Kodak, or Postmedia.   Is healthcare next?

In a presentation at the 2015 Marketing Transformation Forum, Ronald Velten, Marketing Director, Global Technology Services Europe at IBM Europe, identified three waves of digital disruption.  In the first wave, starting in 1995, the shift from analog to digital content had a profound impact on music, photography, and video rental.  The second wave, which started around 2010, has pushed many traditional media companies (print, radio, and television) to the brink of extinction.

More recently, in a third wave of digital disruption, new entrants, unencumbered by existing business models and legacy systems, are taking advantage of the constantly evolving digital landscape to enter markets previously considered immune from digital disruption. These new entrants are using digital technologies, not as tools to incrementally improve existing processes, but as weapons to disrupt the status quo.

Two examples of industries with perceived barriers to entry that once impeded digital disruption are taxis and financial services.  Like healthcare, these sectors are subject to regulatory compliance and are dominated by well-established players.

That both these sectors are threatened by digital disruption is a warning sign that the health sector should heed. How each of these industries is dealing with the threat offers lessons that the health sector should consider.

Taxis

As recently as five years ago a taxi license was considered a good investment.  Today, the price of these same licenses is in freefall in many cities.  New competitors such as Uber are siphoning customers who once had few alternatives if they needed on-demand transportation services.

Taxis have, for decades, operated in a little-changed regulated environment. A GrowthHackers examination of Uber’s phenomenal and rapid growth notes:

“All told, very few people viewed finding and using taxi service as something enjoyable—it was simply something that they dealt with due to the lack of an alternative. Before Uber you were beholden to an entrenched, monopolistic entity, whose sloppy execution and lack of regard for the customer experience was evident at every touch point.”

A less colourful but equally stark comparison between the taxi incumbents and new entrants such as Uber can be found in a recent survey by Ipsos Reid (conducted for the City of Toronto as part of the city’s review of the taxi industry). The survey revealed that less than one-third (29%) of respondents were satisfied with taxi service while nearly two-thirds (65%) reported that they were satisfied with new market entrant, Uber.

How has the taxi industry and the cities that regulate them reacted to Uber’s entry into the market?  The cities are tinkering with the regulations while the drivers protest.

According to a report by the Mowat Centre as part of the City of Ottawa’s review of taxi and limousine regulations, “Canadian jurisdictions initially adopted a reactive approach to ride-sharing firms, with cities such as Toronto, Ottawa, Montreal and Vancouver cracking down on drivers for by-law infractions or otherwise imposing barriers to operation.”

Even when overwhelming consumer demand forced many cities to reconsider their position and introduce regulatory reform, the taxi industry has continued to fight changes to the status quo.

Financial Services

Even the banks are getting nervous about the disruptive power of digital technologies.  According to McKinsey & Company, banks could lose up to 60 per cent of their retail profits to financial technology startups (often referred to as FinTechs).

Toronto-based FundThrough, which operates a business-to-business online lending platform, is one of many emerging Canadian FinTechs. In a Globe and Mail article examining disruption in the financial services sector, Steve Uster, FundThrough’s co-founder and CEO, observes:

“We believe that we are only at the beginning of this trend of startups popping up and filling a hole in financial services by using technology.”

A PwC report examining how Canadian banks are responding to new FinTech market entrants notes that  “Canadian banks will employ parallel strategies that comprise collaborating with and leveraging some FinTechs while innovating to compete with others.”

Why partner with the FinTechs?  Analysts at National Bank Financial asked the same question in a recent report. “Why, we asked ourselves, is the boring but profitable Canadian oligopoly inviting third parties into their most valuable, profitable business line?” to which they responded, “Simply put, we think they are worried … worried that innovators will nip away at, and ultimately fleece, their Golden Geese.”

How will the banks compete? Victor Dodig, chief executive officer at Canadian Imperial Bank of Commerce, proclaimed in a June 2015 speech that” we are responding with nothing less than a top-to-bottom reinvention of ourselves, and the traditional banking model.”

Summary

The third wave of digital disruption will sweep over healthcare just as it is sweeping over the taxi and financial services industries.  Will existing healthcare organizations ride the wave or be sent crashing into the rocks?

In their report entitled The Fight for the Customer: McKinsey Global Banking Annual Review 2015, McKinsey & Company offers a warning I think also applies to the heath sector:

 “Those that do not seek to transform may well become somewhat digitized, but will likely be stuck in the middle – outwardly modern, inwardly struggling, and moving slowly toward extinction.”

What are your thoughts on the digital disruption of healthcare?  Please share your thoughts with me at michael.martineau@avenant.ca or on my blog at ehealthmusings.ca

Ottawa Digital Health Networking Event

On May 18, 2016 from 5:30 pm to 7:30 pm, HIMSS Ontario is hosting a special networking eventing in Ottawa.  My good friend and digital health commentator, William (Bill) Pascal, will open the evening with a presentation on the state of digital health maturity in Canada. After the presentation you will have the opportunity to explore craft beer, wine and food pairings.  Don’t miss this rare opportunity.

Bill is the former Chief Strategic Advisor, Canadian Medical Association and now Principle, Richard Warren & Associates.  He teamed with Roger Girard, former CIO, Manitoba eHealth (and one of my digital health mentors), to prepare the in-depth assessment of digital health maturity in Canada on which his presentation is based.  Roger will be delivering the same presentation at similar networking event hosted by HIMSS Ontario in Toronto on the same evening.

HIMSS members: Free.

Non-members: $45 (includes HIMSS ON membership).

Location: Mill St. Brew Pub, 555 Wellington St. Ottawa (site of the former Mill restaurant).

Registration & cocktails 5:15-5:45

Speaker 5:45-6:45

Beer/wine/food pairings 6:45-7:30

Sponsored by HEALTHTECH