Veteran executives of digital health companies have heard it all when it comes to health system reluctance in adopting new technology.
“We often get a litany of reasons why it’s not possible,” said Dr. Rushika Fernadopulle, chief innovation officer at One Medical. “First they ask, ‘Why should I be doing this?’ Let’s assume they get over that part. Then they say, ‘We already do this,’ which is usually not true. Then my favorite is, ‘We couldn’t do this if we wanted to.’”
Fernadopulle said there is a certain level of hubris at health systems and payers regarding their unwillingness to disrupt their own businesses and partner with digital health companies. The organizations tend to think they can do it all, although he added that attitude is changing.
“They’re starting to realize that partnering with people isn’t a bad thing and maybe that’s the path forward,” he said earlier this week at Modern Healthcare’s Transformation Summit, Austin, Texas.
Fernadopulle founded Iora Health, a company that offers tech-enabled primary care services to Medicare patients by partnering with health systems and payers. It was sold to One Medical, another tech-enabled primary care company, for $2.1 billion in June 2021.
He was joined on the panel by James Nicholls, partner at Fitzroy Health; Linda Finkel, CEO of Avia; Dr. Lucienne Ide, CEO of Rimidi; and Dr. Amit Phull, vice president of strategy at Doximity and an emergency physician at Northwestern Medicine.
While some executives at health systems are eager to change, digital health companies perceive a culture clash between the two sides holding back widespread transformation. The very word ‘disruption’ is likely to make health systems cringe, Nicholls said.
“You have to acknowledge that while disruption is an exciting and provocative word in Silicon Valley, that’s not the reaction you get in healthcare,” Nicholls said. “Changing the word is a sensible idea because the psychology of it doesn’t fit neatly with healthcare.”
Nicholls said there is a huge disconnect between a health system’s C-suite and board, which talk about the need to disrupt from within, and the people who run an organization on a daily basis. Change management remains one of the biggest barriers to transformation, he said.
Panelists said C-suite executives often participate in “innovation theater,” meaning they talk about innovation and disruption, but then take the safe bet and don’t put their words into action. A common excuse that health systems tend to use when avoiding digital health adoption is centered on Epic, the prominent electronic health record system.
“My favorite saying [from health systems] is, ‘We’re an Epic shop so we’re going to have Epic do everything,’” Ide said. “For years, the dialogue was, ‘Epic is going to build that.’ It’s frustrating because it’s an excuse in a lot of ways. And I’m not trying to diminish that because it’s a huge enterprise investment and they should maximize it, but that’s the safe bet.”
Whether they want to or not, Fernadopulle said health system and insurance executives have no choice but to disrupt themselves from within.
“Healthcare in its roots is a consumer business,” Fernadopulle said. “Patients and consumers are free to vote with their feet. If someone builds a better mouse trap, they’re going to walk.”