Derek Anderson is Vice President of Business Improvement at Vanderbilt University Medical Center. He is also an adjunct professor at Vanderbilt’s Owen Graduate School of Management.


The combination of teaching future healthcare leaders and working within a top-tier academic medical center has given Anderson a strong yet sober opinion on the trajectory for traditional healthcare providers. Anderson recognizes the increasing rate of change in healthcare, viewing it as “a lot of potential chaos and a lot of uncertainty.” As a result, providers are being “thoughtful” about their next steps, especially as they look at managing their fixed assets like physical hospitals. He mentioned fewer mergers and acquisitions on the provider side, although the number of transactions in 2018 were the highest to date, with expectations of continued growth, according to PWC.

When asked if “thoughtful” could just be code for “too slow” in a rapidly changing environment, Anderson pushed back. “It is moving faster and that’s why we’re being more thoughtful. If it was moving slow, and it was predictable, and it was behaving the way it has always behaved and we thought history would repeat itself in the future, you would see more [activity].” Instead, emerging market forces are giving providers pause. Technology and the first signs of a consumer market in healthcare – including price transparency – mean that “it is appropriate to sit back a little bit and say, ok, is what we’ve done in the past going to work in the future?”

On that technology piece, Anderson sees healthcare in 2019 through the lens of retail in the ‘90s. “There’s an analogy with Walmart and Amazon. If you wind the clock back 20 years, Walmart was all about big boxes, big stores, bricks and mortar. And then suddenly all the dynamics changed around shopping.” People don’t spend as much time in brick and mortar stores anymore. This is exactly the trend of shifting engagement patterns we’re keeping an eye on. People are accessing care in different ways, with standalone clinics and digital tools now available. Anderson says, “We’re seeing innovation all around. Particularly in telehealth, remote patient monitoring. This reminds me of the Internet. If you were back in the 90s and suddenly the Internet happened, a lot of companies suddenly started to see what might be possible. When I look at telehealth, it’s like the Internet has finally arrived in healthcare. The thought of connecting people wirelessly, remotely, without having to come to a physical asset.”

[bctt tweet=”Healthcare today is like retail in the ’90s: ‘When I look at telehealth, it’s like the Internet has finally arrived in healthcare. The thought of connecting people wirelessly, remotely, without having to come to a physical asset.’ – Derek Anderson” username=”healthfurther”]

As with retail and the dot-com bubble, healthcare has a lot to work through. Anderson points out that consumer expectations like the desire for convenience are emerging in healthcare and driving new services, which is why we’re seeing the rise of companies like Teladoc. Still, “the biggest problem we’ve got today is that we don’t really have a consumer market for healthcare.” Current payment models don’t allow for a consumer market. While an individual can pay for a Teladoc consult out of pocket and use their HSA funds to cover services, the majority of care is still paid for by insurance.

Furthering this problem is the confused perception of what healthcare actually is. “What’s interesting about the system in America is whether you see healthcare as a consumer product or whether you’re back to this idea that it’s something which is based on need,” Anderson says. We’re told healthcare is a benefit by our employers, but it’s one they don’t want us to use unless absolutely necessary. Anderson compares this to a company car that an employer asks you to leave in the garage unless of an emergency. But if we’re not paying for it, why wouldn’t we use it as much as possible? Until we resolve that discrepancy, it will be hard to develop a true consumer market. “It’s a really interesting dynamic right now in that we’re triggering consumer thoughts and consumer behaviors and consumer expectations. But we don’t really have a way to create a massive consumer market yet.”

Changing this reality will also depend on adjusting the regulatory environment, according to Anderson. “I think this is why you see some of the frustration towards providers, where maybe we’re not moving fast enough. It’s hard to deliver to a consumer market that doesn’t really exist while we’ve got all these regulations.”

Luckily, things are moving on the regulatory side at both the state and federal level. “If you look at the rate of change in the last 12 months it’s probably clicked up three or four notches. We’re seeing CMS/Medicare and the state of Tennessee in Medicaid. They’re all trying to find a way to navigate from the old model, which is where you have to physically turn up in a facility that was registered to see a doctor who was registered to receive care. Typically what we see are states trying different pilot programs [like] remote patient monitoring for diabetes. They’ll put that in the legislation, but it will be very much limited to see how it will work.”

In the end, Anderson thinks that despite the current frustration around healthcare, all the pieces are coming together and in the future we’ll see how far along things have come even today. “I think that like most innovation you tend not to see it coming until it’s almost here. It’s there, we see it, we see examples of innovation today where we’re starting to access this consumer market, but it may be another five years before you suddenly realize [it’s] everywhere.”

[bctt tweet=”I think that like most innovation you tend not to see it coming until it’s almost here. – Derek Anderson on the state of change in healthcare” username=”healthfurther”]

Photo by Javier Allegue Barros on Unsplash

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