Coming market disruptions in health care

Last week I had the opportunity to listen to a panel discussion given by executives from Teradata and Claraview given at the Fuqua School of business. The primary purpose of the panel was to discuss career decisions and events made by the executives, intended as food for thought to the clinical informatics students in attendance. In the course of discussion and the ensuing Q&A, some interesting points were made by the panelist about implications of business trends in healthcare.

They made some familiar observations about the growing cost of healthcare, which is now at 16% of GDP, and how this is not sustainable, especially given the impact on medicare of the aging babyboomer population. They went further with this set of ideas than others I've heard, noting that pay-for-performance and other forms of capitation are likely the only ways to get costs under control. This will represent a complete sea change for the provider segment within healthcare, which now operates with a payment for procedure business model. They see this change bringing about an intense future need for investments in information systems on the part of providers in order to manage costs without loss of quality care. They noted that other industries such as manufacturing and retail, have gone through similar transformations and emerged as much more economically efficient markets through the application of data collection and analytics.