Health care appears immune to disruption. It’s a space where the stakes are high, the incumbents are entrenched, and lessons from other industries don’t always apply.
Yet, in a recent conversation between Tim O’Reilly and Roger Magoulas it became evident that we’re approaching an unparalleled opportunity for health care change. O’Reilly and Magoulas explained how the convergence of data access, changing perspectives on privacy, and the enormous expense of care are pushing the health space toward disruption.
As always, the primary catalyst is money. The United States is facing what Magoulas called an “existential crisis in health care costs” [discussed at the 3:43 mark]. Everyone can see that the current model is unsustainable. It simply doesn’t scale. And that means we’ve arrived at a place where party lines are irrelevant and tough solutions are the only options.
“Who is it that said change happens when the pain of not changing is greater than the pain of changing?” O’Reilly asked. “We’re now reaching that point.” [3:55]
(Note: The source of that quote is hard to pin down, but the sentiment certainly applies.)
This willingness to change is shifting perspectives on health data. Some patients are making their personal data available so they and others can benefit. Magoulas noted that even health companies, which have long guarded their data, are warming to collaboration.
At the same time there’s a growing understanding that health data must be contextualized. Simply having genomic information and patient histories isn’t good enough. True insight — the kind that can improve quality of life — is only possible when datasets are combined.
“Genes aren’t destiny,” Magoulas said. “It’s how they interact with other things. I think people are starting to see that. It’s the same with the EHR [Electronic Health Record]. The EHR doesn’t solve anything. It’s part of a puzzle.” [4:13]
And here’s where the opportunity lies. Extracting meaning from datasets is a process data scientists and Silicon Valley entrepreneurs have already refined. That means the same skills that improve mindless ad-click rates can now be applied to something profound.
“There’s this huge opportunity for those people with those talents, with that experience, to come and start working on stuff that really matters,” O’Reilly said. “They can save lives and they can save money in one of the biggest and most critical industries of the future.” [5:20]
The language O’Reilly and Magoulas used throughout their conversation was telling. “Save lives,” “work on stuff that matters,” “huge opportunity” — these aren’t frivolous phrases. The health care disruption they discussed will touch everyone, which is why it’s imperative the best minds come together to shape these changes.
The full conversation between O’Reilly and Magoulas is available in the following video.
Here are key points with direct links to those segments:
- Internet companies used data to solve John Wanamaker’s advertising dilemma (“Half the money I spend on advertising is wasted; the trouble is I don’t know which half”). Similar methods can apply to health care. [17 seconds in]
- The “quasi-market system” of health care makes it harder to disrupt than other industries. [3:15]
- The U.S. is facing an existential crisis around health care costs. “This is bigger than one company.” [3:43]
- We can benefit from the multiple data types coming “on stream” at the same time. These include electronic medical records, inexpensive gene sequencing, and personal sensor data. [4:28]
- The availability of different datasets presents an opportunity for Silicon Valley because data scientists and technologists already have the skills to manage the data. Important results can be found when this data is correlated: “The great thing is we know it can work.” [5:20]
- Personal data donation is a trend to watch. [6:40]
- Disruption is often associated with trivial additions to the consumer Internet. With an undisrupted market like health care, technical skills can create real change. [7:04]
- “There’s no question this is going to be a huge field.” [8:15]
If the disruption of health care and associated opportunities interests you, O’Reilly has more to offer. Check out our interviews, ongoing coverage, our recent report, “Solving the Wanamaker problem for health care,” and the upcoming Strata Rx conference in San Francisco.