One of my customers recently forwarded an article to me from the March 3rd, 2016 issue of the New England Journal of Medicine. The article titled Uber’s Message for Healthcare and authored by Alan Detsky, M.D. and Alan Garber, M.D., struck a chord because it was introducing the concept of disruption from a business model perspective in the healthcare industry. While the article was quick to point out the vast differences between healthcare and taxi services, the conclusion arrived at by the authors is well represented by the following excerpt from the commentary:
“Successful innovators will find ways to solve the problems of unmet expectations and breach artificial barriers to market entry. Because health care is multidimensional, companies can either attack traditional providers to gain market share…or start by nibbling at the edges in ways that could ultimately disrupt the industry…”
From the perspective of a Vein Clinic, what does that mean? How are innovators nibbling at the edges in the healthcare industry? The answer is always the same. In a free market system, the provider that delivers the superior product at the lowest cost always succeeds in the end. So, the very existence of outpatient, physician owned, Vein clinics is in itself an example of nibbling around the edges. Offering patients a more comfortable, service oriented, and cost effective solution to a traditional hospital environment is disruptive. But the effect is not material. Varicose Vein treatment is not a big money maker for hospitals as compared to other endovascular procedures. That said, I believe the next evolution of outpatient endovascular treatment will be far more disruptive.
Over the past few years there has emerged a growing community of entrepreneurs who have been building Cath Labs and providing a much broader array of endovascular procedures in an office setting. Known by Medicare as an Extension of Practice, these new office based facilities can offer everything from Iliac Stent Placement, to Atherectomies, to Gonadal Vein Embolizations, to IVC Filters. In fact, my company, StreamlineMD has several Vein Clinic customers who have recently or are in the process of building such facilities. I expect the pace to increase over the next few years.
In my opinion, this is a win-win across the board. For a physician with the skill set to perform these more complicated endovascular procedures, this evolution presents a very compelling business opportunity. For the patient it offers a more comfortable, convenient and affordable treatment option. And for the payers it is a way to help counter balance escalating healthcare costs.
To tie this back to the NEJM article, for the traditional providers (i.e. hospitals) it represents more nibbling around the edges and more disruption to the industry.