The Economist’s Digital Editor predicts Wearables will kill the Healthcare Insurance industry



Tom Standage Economist

…(17min) data meets healthcare: the chart in the background is cost per genome. So the sequencing of the first human genome took a decade and cost $3 Billion and you can now do it for a $1,000 in slightly less than 48 hours and this is an improvement in price/performance that is much faster than Moore’s Law… …this means that genomics, whole genomic comparison that the NHS is currently doing this program to sequence 100,000 people and then you can start to work out which genes correlate with diseases and so on, the problem is it used to be the sequencing that was the hard bit and it’s now actually the data analysis because the computers aren’t really keeping up it’s pretty hard but the tools are improving and this allows you to do some very interesting things, it allows you to have digital healthcare. It allows you to start to try to work out what the causes and effects really are and when you throw in data from wearable devices like the Apple Watch and other things there are all sorts of interesting new things that you can do. You can start to identify which diseases people are likely to be susceptible to, have them look out for particular symptoms, You can pre-empt and basically treat people and keep them well rather than waiting for something to go wrong which is much much more expensive. This is all great but it threatens quite a lot of existing ways of doing things in particular the health insurance model, the health insurance business model assumes that we don’t know who’s going to get ill but we’re going to know who’s going to get ill. That is going to make the people that are going to get ill uninsurable and the healthy people who aren’t aren’t going to have to pay anything and the only real way around that is probably compulsory risk pooling otherwise known as national health service style medicine. Which is fine for us in Europe where we already have that kind of thing but it’s obviously political kryptonite in America so that’s going to be quite interesting. The other thing about this is again arena shifting. Who’s going to win and lose here and I think it’s quite interesting that we’re starting to see drug companies, GSK is doing this, GSK made a drug that only works in about a quarter people. I think it was for MS. and previously we got used to the idea that drugs should work in everyone you know here’s a drug oh it doesn’t work for me that type of pain killer but blockbusters are drugs you can test and they work in people but it turns out that you know for genetic reasons some drugs will work in some people but not in others so you can start to tune the therapy – and this is particularly useful in Cancer Therapy – you actually sequence the tumour and you can work out which chemotherapy’s will work against it. Anyway what GSK started to do because they were trying to sell this drug to the NHS and it wasn’t working in most Patients so they said “look tell you what just pay us for the Patients it works in” and then a light bulb went off and then they thought wait a minute this is selling an outcome rather than selling a drug and this is what Rolls Royce does with the engines you know it’s selling hours of engine time rather than selling you the engine and I think we’re going to start to see an awful lot of that going on in medicine that it’s the data that’s going to be really valuable because it allows you to predict and optimise and you can start to sell a service and an outcome rather than a thing. You can sell you know this many years of life rather than you know let’s sell you lots of drugs. So we’re going to see lot’s of new opportunities for gathering, analysing and managing health data and Healthcare will depend as much on data as it does on biology today. or so. so this is really going to change the nature of the current set up in medicine because it’s going to be about prevention rather than treatment…

Tom Standage, Digital Editor at the Economist, at the ‘PWC World in Beta’ conference predicts ‘data meets healthcare’ is one of 5 emerging technologies that are shaping todays world.

mHealth Insights:

“…it’s now actually the data analysis because the computers aren’t really keeping up…”

In a world where people are used to being interrupted by Doctors within 18 seconds of opening their mouth I think there are much more basic challenges that need to be tackled before genomics are mainstreamed in the way it’s being described.

If the prediction of future health problems was something we all accept and welcome. I wonder why people with Tom’s outlook think Doctors aren’t walking down the street stopping anyone they see with unusual gaits/tremors/skin symptoms and telling them about the range of conditions they haven’t yet realised they’re developing?

“…you can pre-empt and basically treat people and keep them well rather than waiting for something to go wrong which is much much more expensive…”

I think a lot of people over estimate the power of healthcare providers to enforce behavioural changes in adults within free societies where we don’t ban everything that’s harmful, ration sugar, etc.

“…This is all great but it threatens quite a lot of existing ways of doing things in particular the health insurance model, the health insurance business model assumes that we don’t know who’s going to get ill but we’re going to know who’s going to get ill. That is going to make the people that are going to get ill uninsurable…”

I see lots of lawyers retiring very comfortably on this disruption of the Healthcare Insurance industry. I think most people haven’t yet realised the impact wearable tech is going to have but do we have to wait for that to materialise when most people could anonymously take a smartphone medical and even pay for very accurate medical tests through the postal system (eg. from companies like 23andMe etc).

How long before Healthcare Insurers are routinely refusing to pay out to Patients on the basis that they believe the Patient had ‘insider’ information that they used to ‘game’ the system (by increasing their insurance coverage etc)?

“…what GSK started to do because they were trying to sell this drug to the NHS and it wasn’t working in most Patients so they said “look tell you what just pay us for the Patients it works in” and then a light bulb went off and then they thought wait a minute this is selling an outcome rather than selling a drug…”

This highlights for me how difficult it is for even super smart futurists to understand the imprecision of evidence based medicine and get the concept of precision medicine or how Pharmaceutical companies can move beyond the pill.

Instead of claiming this is some light bulb moment that has created some incredible future scenario we should just ask ourselves if this type of horse trading passes your mother test?

How would you feel if your ill mother was one of the three in four sick Patients who were consuming a drug that had no beneficial effect ​simply because a hospital accountant had negotiated for it to be ‘free’ for the hospital to provide you with it?

“…and this is what Rolls Royce does with the engines you know it’s selling hours of engine time rather than selling you the engine…”

Rolls Royce really need to improve their marketing as this is nothing like what they do with their aircraft engines. Rolls Royce is in the business of servicing and maintaining these engines. It is not in the business of running 75% of them until they stop working (not least because that would mean the aircraft they’re attached to might fall out of the sky).

For a mHealth company that has applied Rolls Royce’s business model check out Telcare a pioneer that is working with employers to better care for employees who have diabetes (and already reporting a $3,300 saving per diabetic employee per year).

What thoughts did the talk leave you with?

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