At every health care security and cyber conference I attend, people want to talk about apps. Without fail, there is at least one:

  • Futurist who thinks she can make a world-changing impact on a disease by offering a highly tailored app to folks with that disease and/or physicians treating that disease.
  • Venture capitalist who’d like to create some type of direct-to-consumer health care model that saves money to the supply chain.
  • Physician who wants to do something with his phone to get around the “hassle” of hospital EMR implementation, or something else.

This has been going on a long time.

What has not been going on is anything close to what we’ve experienced in retail and consumer-facing sales on the Internet and through mobile devices. Scan a barcode and get 10% off grocery specials if you have your Amazon Prime membership and the code on your phone. Pay for Starbucks with an app. Take a picture of a label in Nordstrom, and the app will tell you if it’s available in different sizes in the store, a store near you, or to order and have it shipped to your door. None of these things let you order health care in a size and quantity that fits you when you want or need it, with direct delivery to you in two days free.

I read an advertisement for an event about “what changes in the music industry can teach us about health care consumerism and new health care delivery models.”

Takeaways just from reading the title:

  • You can’t pirate health care and stream it live.
  • You can’t download your favorite vaccine, and (other than the constant flogging of homeopathic nostrums and nutriceuticals) you can’t do health care yourself by watching a You Tube video.
  • And, you can’t ask Alexa to diagnose you.[1]

So I really don’t know what spending a day in that room will do other than reinforce my skepticism that is manifest in this writing.

That analysis is probably a bit unfair. But I hope it shows  that there’s a huge difference between telemedicine or a virtual health visit by some great phone-based application and a true direct-to-consumer health care model like Amazon for purchasing EVERYTHING. Keep in mind telemedicine actually is getting some attention and favorable reimbursement changes from state and federal governments. Also note that we’re not addressing  the “crazy quilt” of provider licensing, which varies by state, and whether you can get a prescription for medications without an in-person visit and exam – that’s a blog all by itself. There still has to be a connection with a licensed caregiver and a record of care that meets whatever medical necessity test a third-party payor requires for the provider to get paid.

I say “third-party payor” in this context because nobody is going to pay for care or support they have been getting for free for years.[2] In February 2016, Chris Hogg of Propeller Health[3] and Rick Altinger of Glooko[4] were interviewed on this problem. According to Altinger, “I really don’t encourage, here in the U.S., anyone to try to build a big business direct to consumer in the chronic disease management arena,” he said. “The road is paved with dead digital health companies trying to get people to pay for things they’re used to other people paying for,” said Hogg.

Even in the chronic health management segment of the health care industry, the smart app or app/device pairing developers focus on what non-patients pay for the care of patients. These developers also try to find ways to “bend the cost curve” to those non-patients (who, by the way, are being asked to pay for these innovations) by helping people get less in-person care. So, it’s really not a “direct-to-consumer” model at all: it’s a “business-to-business-to-consumer” model where the intermediate business has the financial risk of the consumer’s spending. Definitely not Amazon’s retail model.

This dilemma is pointed out  most clearly in the talk about “population health management” and how “shared savings” can be divided between payors and providers when improving health care outcomes. A glance at the data collected on Medicare Shared Savings Program accountable care organizations (ACOs)[5] shows that care is actually more expensive for Medicare patients for the first two years following the creation of the ACO, with real savings occurring only in year four. Virtually all of the entire program’s savings are due to this fourth year of operation by ACOs who choose to stay in the program at least this length of time. This would also explain why self-insured employer groups have been slow to get on the ACO or shared-savings bandwagon, as the “traditional” ACO solution doesn’t actually save the payor any money in the short term.

So, what does this have to do with Amazon? Well, from the media accounts,[6] it appears that Amazon and its partners are just doing what other big employer groups are capable of doing: planning to put their employees into a health plan that leverages the size and spending power of the employers to lower costs and therefore save money. That plan could be a health maintenance organization (HMO) that employs or owns providers, thereby capping costs and requiring employees to use controlled clinics or resources for primary health care or acute hospitalization episodes. Such a provider could use Amazon’s cloud technology in partnership with a major electronic medical record (EMR) vendor to create an interoperable record that could be shared between providers and patients, perhaps utilizing some of the tools we’ve already talked about – at no cost to the patient – to lower acute episodes and further drive down costs.

The legal framework within which Amazon and its partners will innovate is basically unchanged from 15 years ago[7]. Only now, there is more focus on the problem and potential solutions due to the steadily rising cost of care and the intrusion of phone-based technology into every aspect of our daily lives. App developers and venture capitalists think “there’s got to be a way” to harness these addictive phone impulses with purchases in an industry that commands 18% of the gross domestic product and 40% of every federally appropriated dollar. However, if the best you can do is an Apple Watch that can act as an early warning for heart events[8] or a scale that Bluetooths to your phone so you don’t have to actually look down to see how much you weigh, you’re not there yet.

Propeller and Glooko are on the right track, as are apps that basically condense full-blown computer-based health platforms to an app-enabled screenfront.[9] But real health care is still going to be delivered by real professionals looking at real history and physical data and having real encounters with real patients – even if they do it from across the country or across the globe. And, it’s going to be paid for by employers or governments or insurers or patients, just as it is today.

My prediction? Follow-up care and care management are ripe for this kind of innovation, especially in chronic disease management, as is primary care for minor events between providers and patients with already-established relationships. But don’t expect your phone to schedule an appointment with a doctor who’s going to phone in that next dose of OxyContin or to replace a diagnostic colonoscopy any time soon. Any app developer that promises that kind of response will be getting a call from a state medical board or the Food and Drug Administration before you can finish reading the app’s terms of service. Oh, yeah, like ANYone reads those things ….

Barry S. Herrin, JD, FAHIMA, FACHE, is the founder of Herrin Health Law, P.C., in Atlanta, Ga. Herrin offers more than 25 years of experience practicing law in the areas of healthcare and hospital law and policy, privacy law and health information management, among other healthcare-specific practice areas. He is a Fellow of the American College of Healthcare Executives and a Fellow of the American Health Information Management Association. He also holds a Certificate in Cyber Security from the Georgia Institute of Technology. Reach him at 404-459-2526 or barry.herrin@herrinhealthlaw.com.

Comment and Citations

[1] Or Google, for that matter. Taking a picture of that suspicious spot on your butt and asking Google if it’s cancer is not real. It’s not even real if you send it to your dermatologist golfing buddy, as he’s only going to tell you to make an appointment so he – not your phone – can cut it off and take a biopsy.

[2] vator.tv/news/2016-02-29-why-direct-to-consumer-models-are-hard-in-healthcare

[3] Propeller is a health management tool for people using inhalers and is regulated as a Class 1 medical device. The Propeller website does not discuss the price of the device if it is not included with the inhaler, instead suggesting that “the cost … may be covered through a sponsor.” support.propellerhealth.com/hc/en-us/articles/115002051666-How-do-I-get-Propeller

[4] Glooko is an application-device pair that syncs with a patient’s blood glucose meter, insulin pump, and other devices and captures data regarding the patient’s diabetes management. Unlike Propeller, it is not marketed to transmit data to providers; rather, it helps payors lower diabetes-related costs and, therefore, attempts to have the employer plan or insurer pay for its deployment.

[5] avalere.com/expertise/providers/insights/medicare-accountable-care-organizations-generate-savings-as-experience-grow

[6] www.cnbc.com/2018/03/27/amazons-moves-into-health-what-we-know.html

[7] None of this is new. In 2004, I co-authored a paper that discussed improvements in patient care quality as a way to enhance provider reimbursement and lower costs, all in the self-insured space and with year one results. AHLA Health Lawyers News, February 2004, “Pay for Performance: The Case for Quality as an Integrating and Incentivizing Factor.”

[8] www.popsci.com/apple-watch-medical-device

[9] ehrintelligence.com/news/why-are-mobile-apps-lacking-for-hospitals-inpatient-care