3 Disruptive Solutions for U.S. Healthcare: CareMore, Forward, Health City

American healthcare needs a hero. Among other wealthy countries, it

ranks dead last

in clinical outcomes yet costs more than $3 trillion a year. By comparison, Europe spends

$1.8 trillion

annually on healthcare for a population nearly twice the size.

This three-part series, which previously explored the limited impact of

primary care innovators

and the

struggles of U.S. hospitals

, now concludes with the search for a hero – a disruptive cure for what ails the U.S. healthcare system.

Highlighted here are three possible directions the industry could turn and three trailblazing companies hoping to guide the way.

CareMore: In The Direction Of High-Touch Patient Care

Today’s healthcare is extremely people dependent. From receptionists, billing clerks and housekeepers to nurses, technicians and physicians, people account for more than 40% of all healthcare expenditures.

Therefore, one might assume lowering the cost of medical care means slashing headcount. Not at

CareMore

. The company spends twice as much on staffing as the typical healthcare organization – part of an approach that has proven remarkably successful.

Founded in 1993 as a medical group, CareMore was acquired by Anthem in 2011 and rapidly expanded its services across eight states. The company’s president and CEO Sachin H. Jain believes the best way to lower healthcare spending is to invest in the health of patients.

To do that, Jain hires large numbers of nurse practitioners, social workers, physician assistants and pharmacists. Located in care centers, these multidisciplinary teams help seal the cracks of America’s fragmented care delivery system.

In a recent

Forbes editorial

, Jain explained his hire-more philosophy: “Given the false choice between ensuring that I have the right processes and technology in place or the right people … I would choose the latter every day of the week.”

Indeed, people are central to CareMore’s strategy. But to understand why the company may prove disruptive, let’s dive deeper into its model, one that prioritizes disease management, limited specialty referral and reduced hospitalization:

This last point may be the most important. In some ways, CareMore’s model resembles other

cutting-edge primary care programs

thatserve patients with chronic illnesses. But by using nurse practitioners and extensivists to personally manage referrals within CareMore’s cost-effective specialty network, the companygoes a step beyond.

As a result, CareMore achieves

20% fewer hospital admissions

, 23% fewer hospital days per patient and a 4% shorter inpatient stay compared to traditional Medicare beneficiaries.

The biggest question for CareMore is whether it will hit a ceiling. Its people-dependent approach could prove toodifficult to replicate on a nationwide scale. As it tries to expand to new markets, CareMore may also encounter resistance from patients and the broader medical community given the narrowness of its specialty network.

Forward: In The Direction Of High-Tech Patient Care

Adrian Aoun, who created

Forward

in 2016, takes a decidedly different approach to solving healthcare’s biggest problems. With a background in artificial intelligence (AI), Aoun previously created Sidewalk Labs, an urban innovation project for Google and, before that, a news-aggregation startup that Google purchased for more than $30 million.

So, rather than hiring more people, Aoun uses sophisticated technology to reduce healthcare’s massive headcount and costs. He thinks computerized systems can diagnose and treat humans more accurately and affordably. And because human employees are more expensive and less-reliable than computers, you won’t find many of them performing traditional office roles at Forward’s San Francisco location, nor at the one set to open in Los Angeles. Instead, here’s what you will see:

As a primary care model, Forward’s approach is interesting but unlikely to disrupt the $3 trillion healthcare industry. The company's uniqueness is in itstechnology, which is designed to scale up. Through high-tech devices and AI programming, Forward’s model could expand into high-end specialties. Already, the company is introducing automated eye refraction and digitally enabled melanoma screening at little or no extra cost.

Ask most doctors, and they’ll tell you Forward is not the future of medicine. Then again, technology aversion is the very thing that undid industry titans like Kodak, Borders and Yellow Cab.

Ultimately, Forward’s disruptive ability depends on how far and how quickly the company can broaden its scope beyond primary care. For example, will Aoun seek to hire a select group of specialists to consult with patients via video? Imagine the benefit of having top cardiologists and oncologists checking in on that giant wall monitor or via a patient’s smartphone. More importantly, can Forward convince insurance companies to carve out dollars from premiums to pay for the patient care delivered and for the hospital or specialty care avoided? If not, Forward’s going rate of $149 per month may restrict its footprint to the nation’s most affluent areas.

Health City: In The Direction Of Off-Shore Patient Care

Take a one-hour plane ride from Miami to the Grand Cayman Islands and feast your eyes on the palm-tree-lined entryway of healthcare’s third potential disruption.

Health City

is a sophisticated, modern hospital, offering affordable cardiology, pediatric, orthopedic and oncology services with clinical results that rival the best in the United States. Adjacent to the hospital, you’ll see the future site of a five-star hotel. Dr. Devi Shetty hopes to fill it with hundreds of Americans each night, thus making his healthcare tourism plans a reality.

Shetty, an India-born and American-trained surgeon, sees the future of healthcare differently than the leaders of CareMore and Forward. He believes 50% of the costs swallowed up by traditional care providers can be eliminated through discipline and operational excellence.

Shetty’s approach, like the other two, is complex. It includes:

Health City’s biggest challenge is getting patients to travel to the Cayman Islands for care. The objective data affirms the hospital’s clinical excellence and lower costs, but Americans distrust the medical care provided in other parts of the world. With most of its patient population hailing from the Caribbean and South America, Health City’s best hope is to contract with large, self-funded U.S. companies that want to cut their medical costs in half, particularly those organizations willing to offer employees incentives to combine their medical care with a tropical island vacation.

Will Healthcare Disruption Happen? How?

American healthcare is inefficient, ineffective and expensive. In other words, it’s ripe for disruption, which could happen a number of ways. It may be through highly personal care that effectively manages utilization and helps sick patients get healthier. Perhaps high-tech systems will replace expensive humans and create far better outcomes for patients. Or maybe an operationally efficient, off-shore solution will disrupt America’s bloated delivery system, just as it did the manufacturing and IT sectors.

CareMore, Forward and Health City represent three possible approaches to healthcare disruption, but it’s far too early to declare a hero among them. Combined, these companies care for a fraction of 1% of American patients. Should that number grow, it will likely come at the expense of the doctors and hospitals who benefit from today’s broken system. Unless healthcare providers in the U.S. are willing to embrace new solutions and care delivery models soon, they risk being disrupted. The cautionary lesson taught by other industries is that once disruption begins, it’s already too late for the old model to save itself.

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