Prospectus Filed: Are You a Gold Miner or a Bartender in the Digital Health Rush?
Have you ever imagined what medical consultations might look like a few years from now? If not, take a moment to picture it: Will they take place in hospitals, clinics, or at home? If you believe that seeking medical care is confined solely to hospitals or clinics, such a notion will seem quite peculiar, both now and in the future.
Because wearable technology, implantable devices, and smartphone applications will conduct real-time monitoring and map your health status into a digital profile anytime and anywhere, which can be accessed and analyzed in real time from any location. Moreover, the collection of information is no longer the sole factor eliminating the need to remain in a doctor’s clinic for treatment;Telemedicine, home diagnostics, and retail clinics will enable patients to increasingly receive care in the places where they live and work.
Over the next decade, this trend will spark a veritable gold rush in patient data and consumer choices.
With higher incomes, lower expenditures, and fickle consumer loyalty, players across the board—from consumer goods companies to digital mobile telecommunications firms—have strongly expressed their intent to compete. Much like the initial Gold Rush that emerged in the 1840s, we believe two primary business models will emerge this time as well:One type is the "gold miner" player, who primarily engages in deep exploration within a specific domain; the other is the "bartender" type, who offers personalized and convenient solutions to address everyday problems.
The "gold miner" gold-panning strategy requires vertically integrated players (large institutions such as insurance companies, hospitals, and medical teams) to better manage the health of those who incur the highest healthcare consumption expenditures:Patients with complex conditions account for only 30% of the total patient population, yet their medical expenditures constitute 75%–80% of total healthcare spending. By leveraging mobile communications, remote monitoring, and community outreach services, these companies are able to shift care toward more timely interventions and lower-cost home-based measures through effective care coordination and daily support.
Clearly, this model has untapped potential; however, it is merely a rational, technological extension of traditional healthcare delivery methods. The majority of clinical decisions still rest with healthcare providers, while patients are only required to adhere strictly to medical advice.
The “bartender strategy” represents a more radical shift. In this model, new entrants to the healthcare industry—typically from sectors outside traditional healthcare, such as retail, software, electronics, and apparel—focus primarily on empowering patients and enhancing user experience by providing detailed, personalized health information and recommendations. This approach is profoundly disruptive to the traditional model, as it bypasses conventional doctor–patient relationships and grants individuals far greater choice and control over where, how, and by whom they receive care. As Eric Topol has stated, “Human digitalization will create ‘simulated doctors’ who know their physicians best.”
For example, suppose a woman suffers from intermittent palpitations. In the "gold-panning" model, she would be asked by her physician to enroll in a preventive healthcare program. The core of this program involves installing an app on her smartphone to continuously monitor her cardiac activity. Subsequently, the majority of clinical decisions within the program would be made by the clinical care team.
In contrast, under the bartender model, a medical application capable of displaying electrocardiograms (ECGs) might be offered to the patient, with data management rights placed under her control. She would operate the app herself, record her daily activities, and decide whether to upload these data to her physician, to experts from the application vendor, or to a computer system capable of real-time monitoring and data processing.
Furthermore, this application can track users’ daily behaviors, such as physical activity, diet, sleep, and medication adherence. As data accumulates, behavioral patterns begin to emerge, including medication correlations and the frequency and severity of palpitations. It also offers various health interventions, ranging from scheduled SMS reminders for medication intake to notifying pre-designated contacts in emergency situations. Each option represents a potential benefit to be contested by both established market players and new entrants.
One can even envision an “OnStar for healthcare”—a long-distance information transmission service. This service is delivered via an implantable device capable of detecting early signs of an impending heart attack, alerting the patient to take action, and, if necessary, sending a message to 911 to request emergency assistance. Throughout this process, patients retain full decision-making authority and control over their data.
This scenario is now a reality. AliveCor, a digital health company, is marketing a device that can generate electrocardiograms (ECGs) via smartphones. Consumers can choose whether to upload this data for review by third-party healthcare providers or physicians. Device manufacturers and data analytics firms such as WellDoc and BlueStar leverage self-management programs to monitor blood glucose levels and provide guidance to patients with diabetes. Sentrian feeds data collected from biosensors into IBM’s Watson artificial intelligence engine to determine when health interventions are needed to prevent hospitalizations. Meanwhile, Apple’s iWatch and Health app offer real-time monitoring, opening up numerous possibilities for further innovation in the healthcare industry.
This is especially significant given that the product comes from a brand already favored by consumers. If technological advancements are built on the “bartender” model, they can also push the boundaries of healthcare into new retail territories. For instance, Theranos Technology could perform diagnostic tests using only small blood samples, prompting Walgreens to partner with the company to implement this diagnostic approach at its walk-in medical service locations.
Consumers who purchase these services will compel traditional healthcare providers to demonstrate their value in new ways. Because patients can now access and process their own health data, they arrive at each medical visit armed with personalized, actionable professional medical knowledge—far more than just a few printed documents downloaded from the internet. They may even choose to crowdsource their diagnostic services on platforms such as CrowdMed. As professional medical knowledge becomes tailored to individuals and widely accessible, healthcare providers must proactively build relationships and gain a deeper understanding of patient needs to enhance their value.
New entrants applying the bartender model are by no means marginal players. They will fundamentally reshape the flow of capital in healthcare—and create substantial healthcare value in the process. In the forthcoming report, “A Strategic Study of Profit Pools in the Future U.S. Healthcare Value Chain,” the authors argue thatIf the bartender model is adopted, annual healthcare spending will decrease by $400 billion by 2025. This reduction is nearly three times the amount observed during the prevalence of the gold rush model.
The gold-panning model represents progress, but it is merely incremental advancement within the current healthcare paradigm. In contrast, the bartender model profoundly challenges the industry’s prevailing “one-size-fits-all” medical standards and the absolute authority of hospitals, thereby accelerating the sector’s transformation.