Care Redesign

Ripe for Disruption: Why and How Big Players in the Private Sector Are Taking on Health Care

Interview · September 10, 2019

avid Blumenthal Robert Galvin and Namita Seth Mohta head shots - private sector health care disruption disruptor

Namita Seth Mohta, MD, interviews David Blumenthal, MD, MPP, President of The Commonwealth Fund, and Robert Galvin, MD, MBA, Chief Executive Officer for Equity Healthcare.


Namita Seth Mohta:  This is Namita Seth Mohta for NEJM Catalyst. I’m speaking today with Dr. David Blumenthal, President of the Commonwealth Fund, and Dr. Robert Galvin, operating partner at the Blackstone Group and Chief Executive Officer of Equity Healthcare, which manages health care for over 75 employers.

Both executives have had extensive experience and positive impact in all sectors that comprise our complex health care ecosystem. Bob and David, we are delighted to have you joining us today to discuss one of those sectors, the private sector, and its growing commitment to and investment in health care delivery in order to address rising costs and inefficiencies in the system.

Let’s start by level-setting. “Private sector” is an incredibly broad term. How do each of you define the private sector, and what are the key drivers motivating these players to act now?

Blumenthal:  I think of the private sector as the investor-owned or for-profit side of the delivery system, but even in this context as much more about a new crop of organizations that have not traditionally been in health care, at least on the delivery side, and have entered recently with the intention of dramatically changing how health care is delivered, or at least with the expressed goal of dramatically changing how health care is delivered.

We’re talking about large companies like Amazon, Google, and JP Morgan, and others that buy health care in large amounts and have disrupted other industries and now see opportunities to change the health care delivery system.

Galvin:  I would add that it’s helpful to think of payers, for example health insurance companies and employers versus Medicare/Medicaid as private sector, and then the providers, or service delivery companies like the ones David mentioned. There are innovations on each side of the private sector.

Blumenthal:  What I don’t think we’re talking about, for the most part, are the big nonprofit private systems that have traditionally dominated health care, at least in the major urban areas. Though they are getting bigger and more powerful — many of them — they are not the private sector actors that we have been talking and writing about.

Mohta:  What are the key drivers motivating these players to act now?

Galvin:  I can take that one. On the payer side the costs keep going up, without evidence that outcomes are getting better at the same time. If you’re an employer and trying to pay for health care and stay profitable as a company you’re challenged, and that drives change. And if you’re an Amazon, a Google, an Apple, as David mentioned, you see opportunity. You see the biggest sector in the economy that continues to grow. You see a lot of unhappiness, whether it’s the payers as I mentioned, or patients and consumers are unhappy, and you see a lot of possible profits and the ability to do well and to do good.

Blumenthal:  It’s where a lot of the money is. If you are a disruptor, the Silicon Valley mentality creates a feeling that smart people with new technology and new ideas can disrupt just about any sector. Health care looks like it’s pretty ripe.

Galvin:  There’s a mission element to this. When you’re out in Silicon Valley and talking to either the investors or the entrepreneurs, look what they’ve done to retail, what they’ve done to transportation, what they’ve done to sectors that seemed impossible to change, [like] banking. I do think they look at health care and see it ripe, as David said.

Mohta:  Let’s get a level deeper by talking about some specific details. What are examples of creative and innovative things that these types of organizations are doing? Are any of them mature enough yet to have demonstrated meaningful impact?

Galvin:  David, I don’t mind taking that because I’m on the sector side. And no, the answer to the second question is it is too early. It’s so important to de-hype this because there’s an idea a minute. There’s a lot of money to be invested, so the investment capital going into this is immense, and that drives many stories where you would think things have transformed more than they have.

Examples [include] the Apple Watch and how they’re moving into doing EKGs, people are measuring how much they exercise, they’re able to monitor their sleep now. Soon their EEGs will be an example of a disruptor. Telehealth is [another] example. Just this [summer] Amazon’s Alexa announced that they are getting into the health game, and it was the National Health Service in the UK that signed a deal with them. Citizens of the UK are going to be able to ask Amazon questions like, “How do I treat my migraine headache?” and “Do I have a urinary tract infection?” Those are examples of how things are being disrupted.

Blumenthal:  There’s another example I would give that tracks the area where I spent part of my life in the Obama administration, and that is that Apple has agreements with hundreds of hospitals and health care providers to download electronic health records from those providers, with patient permission, onto the mobile devices that consumers and patients carry around with them. If they want access to their records, they don’t have to go through a patient portal — they can have the whole thing available to them as easily as the information about the weather or when their flight is taking off.

Mohta:  What are some unintended consequences of these types of initiatives or technologies? It sounds great, [but] you talked, Bob, about wanting to de-hype some things. Let’s pause and think about what some of the potential unintended consequences are of introducing these types of things to the market.

Galvin:  Sometimes the unintended consequences exceed the benefits, to be honest. When you get into a system as big as health care, as resistant to change in health care, and inherently much more complicated, this is not buying goods and services over Amazon; this is not getting an Uber or using Lyft. These are in many cases very sick people with complicated diseases in a system that’s already very complicated.

One unintended consequence is you make it more complicated for people, so the number of choices they have — and the array of opportunities they have to access these apps — can be overwhelming. The misinformation is another unintended consequence; I’m not sure how good Alexa is going to be, or whether there’s going to be any clinical judgment in Alexa. If you go onto the Web and look for health care information, it’s as likely to be inaccurate as it is to be accurate.

Blumenthal:  As a long-time primary care physician, I have another concern: that it’s going to fracture relationships between anchor clinicians, whether they are physicians or nurses, sources of primary care, and patients, creating confusion about where to go for care and maybe even reducing primary care clinicians’ sense of responsibility for the management of patients since there will be potentially many other sources of contact with the health care system.

Galvin:  One place I would probably disagree with David. I don’t disagree with him that it is something that might happen — I am a primary care physician, and a proud one — but if you look at how people want to access care from a “consumer” point of view, they don’t necessarily want to try and reach a primary care doctor who might not call them back or have to wait a certain amount of time for an appointment. They want immediate access. Whether it’s these convenience clinics that came up, whether they can do it from their phone and soon their watch to get an answer, it’s serving what they want. I’m not talking about the small percent of very sick people, I’m talking about the big percent of people that have everyday health care concerns. I worry about primary care, again, as a primary care physician, because the mode of delivery isn’t consistent with what people want in today’s connected, fast-paced world.

Blumenthal:  The 5% of patients who account for 50% of expenditures need continuous longitudinal care, comprehensive care, and care that’s knowledgeable about their complicated problems. Their simple problems are often complicated by their other conditions. So it’s hard to imagine solving our major health care issues, especially around cost, without developing effective systems for caring for that 5%. That’s where the money is, and it’s also where many of our quality and safety problems are, because those are the patients who are in constant contact with our health care system.

Galvin:  Here I agree with you. For that 5% on the delivery side, I don’t see much gain from this tech, but that means 95% of the population might not have their service needs met in a system that serves the 5%. I see it atomizing, and I see all this investment capital, and all the uptake by individuals as they go into these convenience clinics and increasingly use telehealth, to be a sign of that. I do worry, like you do, David, that the 5% are really, from a physician’s point of view, the most important because they are ill. They do need coordination; they need primary care physicians. But I don’t think a system that doesn’t well serve the other 95% is not going to get disrupted.

Mohta:  The best kinds of conversations are those where we integrate many different perspectives out of which we’ll find a path forward as we continue to [shape] — as you, Bob and David, are both leading and shaping the conversation — the structure of our future health care delivery system, and beyond that our larger health care ecosystem.

Thank you for speaking with NEJM Catalyst today. We appreciate it.

Blumenthal:  Thanks for talking with us, Namita.

Galvin:  Good, and thank you.

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