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HealthCare - An Industry Under Transformation

Vik Torpunuri
CEO-CentraMed
Tuesday, October 20, 2015
Vik Torpunuri
What if your cell phone could detect cancer cells circulating in your blood or warn you of an imminent heart attack? Ubiquity of smart phones, bandwidth, pervasive connectivity, social networking, genome sequencing, powerful computers, imaging capabilities, information systems, and regulations are converging to create an unprecedented perfect storm in the U.S. healthcare industry. We are going to cover five major trends that are impacting the healthcare industry.

First, Regulatory Reform
Lately, healthcare reform is the most talked about topic in the US. Not a day goes by without a healthcare headline. Regardless of the political spectrum, Affordable Care Act (ACA) has been the most disruptive legislation for the industry. Since the introduction of Social Security, Medicare & Medicaid in the sixties, many attempts have been made to amend healthcare. However, ACA has proved to the most successful catalyst. ACA expanded coverage, shrunk the toughto- nut crack of uninsured population, introduced value (vs volume) based reimbursement , cuts in medicare reimbursements, bundled payments among providers, health grades for providers, readmission penalties, quality of care expectations, factored patient satisfaction into reimbursements, pushed for digital records, interoperability among providers and many more. As a result of this multi-faceted approach, we are witnessing unprecedented changes in the industry with mergers of payers (ex. Aetna & Humana), hospitals, pharmacies, physicians. New entrants are stepping in with lower cost of care models (e.g. Walmart). Every constituent is forced to evolve and come up with innovative ways of doing business for survival.

Second, Demographics
Changing demographics are impacting care composition. With growing income levels in the last century, we are living longer, eating richer food, do less physical activity, picked up unhealthy habits of excessive tobacco and alcohol, and resulting in an aging and unhealthy population. The facts are staggering - nearly 75 cents of every healthcare dollar goes towards chronic diseases such as obesity, diabetes, heart and lung diseases. 5 percent of population consumes more than half of all healthcare spending. With wearables (e.g. Fitbit, iWatch), and thousands of smart phone apps, there is growing trend of consumers wanting to own their healthcare data, monitor the key stats, and modify their behavior towards better health. Change in life styles could have positive impact on healthcare spending.

Third, Genomics and DNA Sequencing
First time in the history of modern science, a human can be digitized (human genome has 6 billion digits). Human DNA could be mapped for under $1,000, less than a cost of a traditional chest x-ray. This emerging market is going to have wide ranging implications in medicine. With every human being, as a digital box. and a source of big data, good and bad genome life codes could be identified very early, even before birth. Knowing the propensity of an individual towards a disease, care could be personalized, and shift from 'reactive' to 'proactive' medicine. With early detection of a likely disease, mass mammograms and prostrate exams could be replaced by proactive individualized care, thus avoiding unnecessary tests and saving billions of dollars. Unfortunately most care providers don't know how to read a DNA map and provide medical advice; however a lot of innovative research in this area is pushing towards a positive trend.

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