September, 2014

We've been traditionally worried about big iron players, such as GE, Philips or Pharma as our largest competitive threats. Meanwhile non-traditional competitors have been entering the market unnoticed, such as Apple, Dell Computers, Google, CVS, Walgreens and others. Some of these companies may be customers for medical device suppliers. Others intend to dominate not only the device and software space but providing care as well. Time to watch these companies and develop competitive strategies before they put you out of business.

Gallup reports that one in four healthcare dollars spent in healthcare can be attributed to defensive medicine – about $650 billion annually. These costs are passed along to everyone, significantly driving up health insurance premiums, taxes to cover public health insurance programs, co-pays and out of pocket costs.

The problem is likely to get worse under the Affordable Care Act. There will be fewer physicians in the workforce and 30 million more patients with healthcare coverage. The practice of defensive medicine will escalate as more patients are cared for by people who are overworked, and increasingly they are seen in settings such as emergency rooms by people unfamiliar with the patient.

Kaiser Permanente CIO Philip Fasano wrote an excellent book on Healthcare IT - a must read to learn more about both IT in the health care space and Kaiser. Mr. Fasano's move to the largest health insurer is a significant tell for our business, notably the increased reliance on big data as well as the alignment of insurance companies and care providers.