What we saw at HIMSS – A new world order

Mar 31, 2016

What we saw at HIMSS – A new world order

Healthcare IT, Healthcare Newsletter, Newsletter , 0 Comments

Our February / March 2016 Healthcare IT review is HERE.

A few weeks ago, like many of our colleagues in our industry, we put on our comfortable shoes and trotted along the long aisles of the exhibit halls at HIMSS in Las Vegas. We visited many booths, and talked to multiple vendors, regulators and clients. Here are a few of our key takeaways.

1. We did not see that many vendors with hospital beds on the show floor – We say this with a bit of tongue-in-cheek. But it is a fact that “care” is increasingly moving out of the hospital to other care settings. Despite the increase in population, total number of days spent in hospitals is down. Companies are building successful businesses around the whole concept of “care continuum”. That said, not all the pieces have come together. We foresee much more M&A activity before dominant players can emerge.

2. CMS has laid down the law on value-based reimbursements and bundled payments, but most providers are not ready – We were encouraged to see more mature pop health vendors, which are the cornerstones of the new reimbursement models. But we need a more cognitive computing approach to clinical data, rather than the existing patch work of basic statistical models, to address the regulatory requirements.

3. Interoperability is inching ahead rather nicely – We are more optimistic than most in this area. Even vendors that were historically protective of their data have seen the light. We like the fact that the government is leaning hard on all vendors. FDA has joined the force and has issued guidance for manufacturers of interoperable devices. Mind you, the progress will be slow but overtime the implications for vendors that make their living as system-level interoperability engines are significant. They need to gradually move to data-level integration and analytics or run the risk of being marginalized.

4. We were disappointed to see many clinical predictive analytics companies still focused on crunching claims data – We often forget that claims data is only 15-20% of the individual’s health profile. It is retrospective, limited, and often yields poor results. We saw some exciting companies that are now able to ingest clinical data, genomics and life style data (through wearables), and generate a more holistic view of the individual. It is time for all of us to realize that patient-generated data is a lot more valuable than sophisticated algorithms written on claims data.

5. Ransomware and other security breaches are attracting large security software players from outside the industry – There have been multiple incidences where hackers have discovered the right price to charge for returning hijacked medial data. In February, Hollywood Presbyterian was hacked and faced a ransom of $3.4 million payable in Bitcoin. Blurring boundaries between applications and infrastructure will materially increase the complexity of providers’ and payers’ security needs. Vendors with experience in sophisticated industries, such as finance, are better equipped to deal with these hackers. So we were not surprised to see many of them on the show floor.

6. The new care delivery models will be the biggest contributors to the U.S. productivity gain – Yes, it is true that U.S. healthcare expenditures account for over 17% of GDP vs. defense spending which accounts for only 4%. But the rate of increase has slowed down despite the addition of 10-15 million newly insured individuals to the system. We saw many companies that have successfully implemented technologies such as patient self-service, e-visits and patient self-management. As these new models go mainstream, the net economic benefits are expected to exceed 10-12% of healthcare spending. That is more than any other industry in the U.S.

As the conference came to a close, one thing became clear to us. While the human value that our industry supports transcends economics, technology is our only hope for bringing efficiency to the system and making it affordable to all. We should be proud. Click HERE for our most recent newsletter on the Healthcare IT space.

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