Why So Many New Tech Companies Are Getting into Health Care

A flood of new health care IT companies has been pouring into the U.S. health care market. The cause of this torrent: the recognition that as market and regulatory forces alter incentives in health care, IT companies will play a powerful role in combating the overemployment and declining productivity that has plagued this industry and in helping providers improve the quality of care.

Within the next decade, software tools will eliminate thousands, perhaps millions, of jobs in hospitals, insurance companies, insurance brokerages, and human resources departments. Not the jobs of people who actually provide care — but those of administrative middlemen, whose dead weight contributes to economic loss. Here are five examples:

  1. Digital insurance markets, combined with ACA-enacted regulatory changes such asguaranteed issue and community rating, make it possible to price and sell health plans to anyone immediately. These developments will decimate the armies of brokers who act as intermediaries between customers and insurance services.
  1. Price transparency, digital insurance products, and tools such as reference pricing make it possible to generate an exact price and instantly collect payment for a health care service. As a result, revenue cycle managers in hospitals and claims adjudicators in insurance companies will be displaced.
  1. The inevitable shift to the cloud will render obsolete the costly, insecure data centers that most doctors and hospitals are now building, staffing, and running.
  1. Adopting self-serve mobile applications will eliminate the forms, faxes, and excess staffing at many call centers, thereby improving satisfaction for everyone in the process.
  1. Centralized clearinghouses that share information across organizations and state lines will eventually replace the byzantine, paper-based process of credentialing doctors, tracking continuing medical education, and keeping licenses up-to-date. That means smaller staffs in hospitals’ medical affairs divisions, health plans, medical boards, and state and local health departments.

https://hbr.org/2014/12/why-so-many-tech-companies-are-getting-into-health-care/

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