Pulse of the industry

How the genius of technology is transforming health care

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Frans van Houten
CEO, Royal Philips

The grand challenges of the health care industry are well-understood: aging populations are expanding, customer expectations are fast-increasing and pressures to manage costs continue unabated. Virtually every citizen, every health care system and every nation is affected.

I firmly believe that technology’s potential to transform health care is at least as great as its ability to disrupt the banking, retail and entertainment, transportation and hospitality industries. Yet the usual economic norms governing businesses don’t apply to health care in the same way.

As one US hospital CEO points out:

  • Health care is the only industry where the person ordering the service likely doesn’t get the service.
  • The person receiving the service likely doesn’t pay for the service.
  • The provider of the service likely doesn’t determine what it gets paid for the service.
  • And the payer for the service likely determines the price but does not receive the service.

That’s not to say that innovation isn’t driving huge, positive change in our industry — it is. Digitization and connectivity are underpinning two major trends: the personalization of care and the industrialization of care. And those trends are changing the way health care literally works for patients, physicians and health systems.

The personalization of care

With the rise of connected devices and big data, consumer and professional health care are converging to advance more effective and individualized treatment pathways. We call this the personalization of care.

For consumers, increased connectivity and data sharing are driving improvements in self-management and adherence to treatments. In clinical settings, a rich patient context and health informatics data sets are advancing diagnoses that are right the first time, enabling highly efficient, tailored treatment pathways. This trend in care personalization is also changing the relationship between care teams and patients and improving the overall patient experience.

One fine example is the way Arizona-based Banner Health is pioneering telehealth services with its Intensive Ambulatory Care program. Using telemedicine, Banner brings individual self-management and treatment strategies to patients with complex medical situations due to multiple chronic conditions — a demographic that accounts for around half of all health care spending.

Since launching the program in 2014, Banner has reduced hospitalization rates and the number of days spent in the hospital by around half. It has also reduced its 30-day readmission rate by 75%, thus cutting the overall costs of care by more than one-third — all while improving overall patient outcomes. It’s an impressive approach that is transforming both personal and professional health care.

The industrialization of care

The second trend is the industrialization of care. Now that digitization has enabled the standardization and optimization of health systems’ building blocks, it’s possible to drive more complete integration of health systems and reduce procedure variance — delivering improved outcomes at lower cost.

At its most prosaic, digitization means the introduction of standard industry practices such as Lean, Six Sigma and Variance Analysis to reduce waste and improve efficiency.

More tellingly, digitization facilitates the adoption of state-of-the-art clinical decision support algorithms and enables health systems to design scalable, repeatable processes and workflows that optimize care delivery. The end result is first-time-right diagnoses that improve patient outcomes and reduce health care costs.

Sweden’s Karolinska University Hospital is using such principles to rethink the stroke care pathway and promote seamless collaboration between emergency responders and the hospital. Patient assessments are conducted in the ambulance rather than the hospital and take advantage of continuously available data, including precision diagnostics and predictive analytics. Upon arriving at the hospital, the patient moves straight to the hybrid operating room for treatment, reducing “call to needle” time, the period between an ER call and the onset of treatment. That’s critical because numerous studies show patients have significantly better outcomes when treated within the first hours of a stroke’s onset.

The post-operative, rehabilitation phase is just as important for the patient’s return to maximal health. After leaving the hospital, treatment effectiveness can be measured using continuous monitoring. Built-in feedback loops allow the fine-tuning of treatments to coach patients back to healthy lifestyles.

A potent platform for innovation

This combination of personalization and industrialization is a potent platform to support further innovation. For example, consider how we are connecting artificial intelligence and data analytics via cloud-based solutions to accelerate precision medicine and support medical staff.

More and more, we want to unlock insights from rich data sets to gain a deeper understanding of both individual patients and populations. This requires that we make use of all data sources — pathology, radiology, genomics and longitudinal, lifestyle-related information. The goal is to customize population-based health recommendations using individual-specific data, resulting in first-time-right diagnoses and personalized treatment plans that put patients at the center of care.

Last year, Philips celebrated 125 years as an innovation company, and we have learned to engage more closely than ever with our customers to tackle the challenges that new technologies can bring. For us, that means co-creating solutions with organizations such as Banner Health and Karolinska.

Of course, there remains much to do if we are to capitalize on technology’s potential. Our industry’s incentive systems reward “old” ways of working. We need to learn to put a premium on prevention and patient-centered chronic disease management, for example by rewarding outcomes and behavior change, rather than throughput.

These are big issues — and they won’t be solved overnight. However, we can make an important start to tackling health care’s biggest challenges by rapidly embracing technologies that simultaneously enable the personalization and industrialization of care.

This article is excerpted from our annual report, Pulse of the industry: Medical technology report 2017. Download the pdf for more from our report, including these featured guest articles: