The Leaflet Article
3 Black Swans In Healthcare You Didn't See Coming
When I spoke at the Healthcare Facilities Symposium & Expo last October, I put a lot of information out there. Which is understandable given that I had 450 PowerPoint slides. I wanted to take a few minutes and elaborate and expand on a few of the points I made regarding “Black Swan” changes/developments in the healthcare arena which might affect you.
To review, a “Black Swan” event is something that appears out of nowhere, and changes everything. People later claim to have seen the event coming, but they really didn’t. For example, Netflix was a Black Swan event to Blockbuster. The iPhone was a Black Swan event to Nokia, which saw its dominant market share for mobile phones evaporate, and forced a sale to Microsoft. A more recent event is the discovery and development of the shale oil finds in North Dakota and Ohio, which will lead to the U.S. being a net energy exporter in a few years.
In healthcare the most obvious Black Swan example cited is the Affordable Care Act, however, we all saw that coming, we’ve just no way yet to fully judge the consequences.
I’d like to take a look a 3 Black Swan events in healthcare which fascinate me, and I believe will be of interest to the readers of this newsletter. The first is the rise of distributed medicine, the second is the changing demographics of the patient population in the United States (especially as it relates to longevity), and the third is the rise of “ambient intelligence” in hospitals, which I hope will lead you to consider its effect on hospital design.
What do I mean by the term distributed medicine? For the purposes of this article, distributed medicine will be the delivery of healthcare at someplace other than a formal hospital.
I live in Augusta, Georgia. My father was born at University Hospital here. He did his medical training at University Hospital. He was a thoracic surgeon at University Hospital for 35 years. And ultimately he died at University Hospital. Both of my children were born at University Hospital. And my ex-wife is a surgeon at University Hospital. Accordingly, University Hospital has played a big part in my life, as most hospitals have in the past in terms of delivering healthcare to members of the community.
But nowadays things are changing, and people are getting their healthcare at places other than hospitals or their doctor’s office. Inpatient care is still delivered primarily in hospitals. Long-term care is typically given in nursing homes, assisted living homes, or in home through home healthcare. But the delivery of ambulatory care seems to be changing.
If you look, the focus of ambulatory care services has been preventive care, acute care, and some chronic care. If you at the patient base of ambulatory care, older adults seem to be overrepresented. In any event, the places where this patient population receives their care are changing in what I perceive to be a Black Swan fashion.
For example medical tourism is growing by leaps and bound. And by leaps and bounds I mean it’s growing by 25 to 35% per year. What is medical tourism? Basically we’re talking about patients in the United States that would be receiving ambulatory care in the United States, leaving the country to obtain this care in other places. This year approximately 680,000 people will leave the United States to receive the medical care somewhere else.
This is driven by several factors. One is the overall trend in the last few years of an increase in outpatient surgery. Procedural volume from 2009 to 2013 at ambulatory surgery centers has risen at an annual rate of 9%. Today there are nearly 5,000,000 outpatient surgeries performed at ambulatory surgery centers per year. It’s just as easy to be an outpatient in the United States as it is to be an outpatient outside the United States, and increasingly medical tourism operators are taking advantage of this fact, utilizing sophisticated marketing strategies to attract patients to destinations such as Brazil, Coast Arica, India, and Singapore to receive medical care.
One medical tourism company on the Internet advertises a single knee replacement for $11,500, which includes 2 hospital nights and 10 recovery nights. The interesting thing about these recovery nights is that they take place at a five-star resort in Costa Rica. Patients are offered “five-star recuperative accommodations at some of the world’s finest hotels” and “special meet and greet and VIP concierge treatment throughout the trip,” as well as private air-conditioned transportation and travel services.
This sounds attractive, especially when you consider that major health insurers in the United States have medical tourism pilot programs that will pay for these trips. This includes the Blue Cross insurers in the states of Wisconsin, California and South Carolina. For the insurers, they are able to obtain outpatient surgery services at lower costs, and for the patients they are able to receive orthopedic or plastic surgery type procedures in a very nice environment.
This is not the only example of medical care being delivered in a distributed fashion. Walmart has aggressive plans to ultimately have health clinics in one third of its nearly 5000 retail stores. Walgreens has nearly 800 retail healthcare clinics in their stores. There’s been a notable rise in the number of urgent care clinics, many owned by physicians, but also many owned by hospitals to operate as sort of a feeder service for their inpatient services.
In many ways it appears that the delivery of outpatient care, from larger hospital-based centers to more ambulatory centers in different types of heretofore unusual locations, is mirroring the shift in computing that we’ve seen over the last 20 years from a large mainframe based computer systems to desktop and mobile systems. This change sort of snuck up on us, but I believe it’s going to have an accelerating impact on the physical location of healthcare delivery.
So the 1st black swan event I’ve addressed considers where people are getting their healthcare delivered. The 2nd is who is receiving this healthcare. Our country along with many others, is undergoing a profound upward shift in longevity, which is ultimately going to lead to a huge proportional increase in the number of older Americans receiving healthcare.
In the year 1900 the average American could expect to live to be 47 years old. If you’re born today, your life expectancy is upwards of 80 years. Combine this with a sharp decrease in birth rates in the United States and you have a huge, mathematically unstoppable, demographic shift.
One of my dad’s best friends was a physician in Augusta, Georgia named Dr. Curly Watson. He recently died at the age of 102, and he was still practicing medicine, in fact he was the oldest physician in the United States still practicing. I think this type of situation is slowly going to become more of the norm than the exception, that is, older Americans, much older Americans, remaining in the workforce far past the typical retirement age of 65.
In 1980 approximately 10% of Japan’s population was over the age of 65. By the year 2000 that number had risen to 17%. And in 2011 that number had risen to 23% of the population. This was caused by a combination of low birth rate and increased longevity.
In 1980 about an 11% of the population of the United States was over 65, by 2000 that number was near 13%, and in 2011 that number had risen to 15%. By 2030 it is projected that 20% of the United States population will be older than 65, and nearly 4% will be over the age of 85, as opposed to 2% in 1980. By 2045, the number of centenarians in the United States is projected to reach 750,000, a nearly twentyfold increase from today.
By the way, increased longevity driven by advances in medical care has resulted in the interesting fact that if you’re a woman in the United States, for every extra year that you live, you gain an extra 3 months of longevity. In other words if a woman manages to live 10 years from today, at the rate of increase in longevity as it now stands, she’ll gain an extra 30 months of life expectancy that she doesn’t have right now.
We’re living longer, and young people aren’t having as many babies. We are rapidly becoming a nation, like Japan, of older citizens. And this higher proportion of older citizens require different types of healthcare. The population of older adults will grow dramatically over the next 50 years, especially the oldest old, that is, those 85 and older.
Older adults consume more ambulatory care, hospital services, nursing home services, and home healthcare services than younger people. Transportation to health care services is more of an issue for older adults as their driving ability is likely to become strained. More than 90% of people in their 60s are licensed drivers, but only slightly more than 50% of people in their 80s are still licensed. This drives the trend we’ve spoken of earlier of distributed healthcare.
Baby boomer older adults will have a smaller pool of potential family caregivers than current older adults. They have had fewer children than their parents, and are more likely to have had no children. More than 12% of women in the baby boomer generation are childless. The baby boomer generation are also more likely to be divorced, with lifetime force rates projected to be 53%, and thus will be more likely to live alone as they enter old age.
So what does this mean for hospitals and healthcare services? It means that more and more services will be provided at the homes of patients, in group settings, in nursing homes and assisted living facilities, or through the Internet using mobile devices. Technology will play a growing role in heightening productivity amongst health officials by allowing them to serve more patients, thus alleviating some of the strain caused by the shortage of primary care physicians.
An interesting thing happens as people live longer than 85 years. From 65 years to 85 years the highest proportion of healthcare expenditures are Medicare type services. However after age 85 nursing home care expenses become a higher proportion of the expenditure per person, probably because if you’ve lasted until age 85, you won’t get some of the chronic healthcare maladies that drive higher expenses.
All these demographic factors will combine to produce a patient population that is disproportionately older, less mobile, and less likely to receive their health care in a standard hospital setting.
Finally, I’d like to talk about one area of technology that will affect hospital design in a black Swan fashion. This is the emergence of “ambient intelligence” which is a sort of merging of all the data inputs in the hospital, organizing them in a meaningful fashion, and using the resulting inferences from that data to improve medical care.
A lot of what follows is predicated upon the successful implementation of electronic healthcare records. If you mention EHR’s to a member of a hospital staff they typically will groan, because it is been such a painful, forced process. I tend to look at it a little bit differently, however. The upside to EHR’s is that we are finally collecting data and organizing it in a systematic fashion that finally allows us to study this data and make sense of it. This in itself is going to lead to many unintended consequences, I believe most of them good. For example, the problems that Vioxx was causing patients was not really driven home until a detailed study of the medical records of Veterans Administration patients using the drug was undertaken, and an inference from the data was made that Vioxx was causing patients problems.
Data is key in driving my final topic.
Much of this data comes from the patient’s electronic healthcare record, but much of it will also come from new data sources such as wearable technology, and indoor GPS. One of Apple’s recent innovations, which has inexplicably gone unnoticed, is called iBeacon, which combines standard GPS location services with advanced indoor location services (driven through Wi-Fi and Bluetooth) to provide an incredibly accurate location positioning service, not only in terms of longitude and latitude, but also altitude, I.e., it is so precise that it cannot only tell you inside the building exactly where you are, but on what floor you are.
Imagine an Alzheimer’s patient in a hospital has wandered away from his room, entered the stairwell, and fallen down a flight of stairs. An accelerometer he is wearing on his wristband would give an alert that he has taken a sudden fall, alerting the hospital staff. The indoor GPS on this bracelet would indicate his exact location, and his existing electronic medical record would guide the staff as to the particular care this patient would need. So ambient intelligence is a general “awareness” of the hospital driven by systematic organizing and data mining of an increasing number of data inputs. It is a new paradigm in information technology, in which people are empowered through a digital environment that is aware of their presence and context, and is sensitive, adaptive, and responsive to their needs, habits, gestures, and even emotions. It creates a proactive healthcare environment through the use of ubiquitous computing and medical devices.
It is like a bunch of autonomous agents helping to take care of patients. It very much resembles HAL from 2001: A Space Odyssey. It sounds like science fiction, until you read the paper entitled “A Distributed Ambient Intelligence Based Multi-Agent System for Alzheimer’s Healthcare.”
These events I describe are happening now, but like any standard black swan event, we just really didn’t see their effects coming. I believe that each of the topics I’ve addressed above will affect healthcare in ways that we cannot quite grasp yet, but that will ultimately accrue to the benefit of the patient.