Why can we see all of our banking, credit card and brokerage data on our phones instantly in one app, all while walking into a doctor’s office without seeing our health records, diagnoses and prescriptions? Our state of health must be as accessible as the balance of our checking account.
The liberation of financial data enabled by startups like Plaid is starting to happen with health data, which will have an even deeper impact on society; it will save and prolong lives. This accessibility is fast approaching.
As early investors in Quovo and PatientPing, two pioneering companies in financial data and healthcare respectively, it is evident to us that the winners of healthcare data transformation will be different from those of financial data, even if we are heading towards a similar end state.
For more than a decade, government agencies and consumers have pushed for this release.
This push for greater data liquidity coincides with consumer demand for better cost and quality information.
In 2009, the Health Information Technology for Economic and Clinical Health (HITECH) Act provided the industry’s first big boost, catalyzing a wave of digitalization through electronic health records (EHRs). ). Today, over 98% of medical records are digitized. This market is dominated by multi-billion dollar vendors like Epic, Cerner and Allscripts, who control 70% of patient records. However, these giant providers have yet to make these recordings easily accessible.
A second wave of regulation has started to tackle the problem of trapped data in order to make EHRs more interoperable and useful. Department of Health and Human Services agencies have mandated data sharing between payers and providers using a common standard, the Fast Healthcare Interoperability Resources (FHIR) protocol.
This push for greater data liquidity coincides with consumer demand for better cost and quality information. Employers routinely shift a greater share of health care spending to consumers through high deductible health plans – from 30% in 2012 to 51% in 2018. As consumers pay more, they care more about value different health options, but are unable to make those decisions without real-time access to costs and clinical data.
Tech startups have the opportunity to facilitate the transmission of health data and respond to the push for regulation and consumer demands. Lessons from fintech make it tempting to assume that an advocacy for health data would be enough to tackle all healthcare challenges, but it’s not the right model. Plaid’s aggregation model has benefited from a relatively high concentration of repositories, a limited number of data types, and low barriers to data access.
In contrast, healthcare data is dispersed among tens of thousands of healthcare providers, stored in multiple formats and data systems per provider, and is rarely accessed directly by patients. Many people log into their banking apps frequently, but few log into their healthcare provider portals, if they even know one exists.
HIPPA regulations and stringent patient consent requirements also significantly increase the friction around data access and sharing. Financial data primarily serves as a one-to-one use cases, while health data is a many-to-many issue. The data of a single patient is distributed among many doctors and establishments and is necessary for as many people for the coordination of care.
Because of this landscape, winning healthcare tech companies will need to build around four propositions: