Note: my views. Not advice. Original article can be found here.
I’ve always been curious about the top 0.1 percent.
Their mindsets, backgrounds, upbringing, perceptions, skills, and behavioral traits that got them there.
After living through the Dot-com bubble, 9/11, Enron-WorldCom, the 2008 financial crisis, the meteoric rise of technology (search, e-commerce, social media, sharing economy), and the rise of a new class of billionaires, I intuitively sensed that there was a disconnect between what was going on in the real world, and what we were taught to follow in school.
An interesting read that I came across in 2017 was that the biggest existential threats to humanity include: climate change, food-water shortages, pandemics, nuclear war, tyrannical dictators, artificial intelligence, and an asteroid collision. Intriguing.
Over the years, I’ve talked with many people with different viewpoints and applied their observations, insights, and learnings to my company and professional career with the goal of developing financial, mental, physical, and emotional fitness and resiliency.
Since 2009 I’ve been extremely passionate about the intersection of culture, media, finance, and technology and how it impacts health care and the workforce.
I’m a student of trends — spotting and identifying them, preparing, and putting myself and my clients in a position to capitalize on them.
I’m also a student of risk. I’ve studied what it encompasses and how best to decrease the downside while maintaining the upside.
Here are a few of my observations over the last two decades:
1. We can’t depend upon governments, politicians, social security, pensions, or jobs anymore. The traditional path is no longer en vogue.
2. Our educational system is behind. Countries including China, India, Korea, and Japan are “eating” our talent for lunch. There is an exodus of talent moving from traditional fields into more innovative and meaningful ones. The best and brightest are leaving the United States for better opportunities. The best and brightest are electing not to go the traditional path anymore, starting their own companies and leaving the workforce en masse.
3. Our financial and political infrastructures and systems are outdated and benefit only a tiny segment of the population.
4. Nobody is going to “save” us. We are responsible for our own economic and financial freedoms. No path is “guaranteed.”
The larger question is: How does this apply to healthcare, and what does this mean for the future workforce?
Our healthcare system is behind. Since 2000, we’ve seen the erosion of our modern healthcare system. Costs are skyrocketing. Burnout is at an all-time high. Workplace violence is increasing. Workers are quitting in droves. Other countries have similar or better outcomes for far less cost and are more efficient. At the same time, we have an aging population and staffing shortages. Health care is controlled by centralized players who do not understand the complexities of patient care while continuing to profit personally at everyone else’s expense, offering minimal to no value whatsoever.
What do Moore’s Law, software is eating the world, paranoia, and the innovator’s dilemma have in common?
Ever since the invention of the microchip, Gordon Moore predicted that the computing speed is expected to double every two years, and everything will get smaller, faster, and cheaper.
Currently, that doubling time is every 18 months. Computational capabilities are increasing exponentially. Data is the new “oil,” and the semiconductor industry is the “real estate” upon which innovations will be built upon.
In his revolutionary book, The Innovator’s Dilemma, Clay Christensen described the classic effect of disruptive technologies, why market leaders are often set up to fail as technologies and industries change, and what incumbents can do to secure market leadership.
In his book, Only the Paranoid Survive, Andy Grove reveals his strategy for measuring the nightmare moment every leader dreads — when massive change occurs, and a company must adapt overnight in a new way or fall by the wayside.
This moment is known as the strategic inflection point.
When managed right, it can be an opportunity to win in the marketplace and emerge stronger than ever. If managed incorrectly, it can result in colossal failures, such as Blockbuster Video.
U.S. health care is currently past the strategic inflection point.
The six Ds of exponential growth
Peter Diamandis, MD, describes the six Ds that innovation encompasses.
Digital — everything is becoming digitized. Think of CDs, tapes, and VHS as everything being accessible on smartphones and streaming devices.
Dematerialized — everything is becoming dematerialized. The future will be where physical items will be luxuries as opposed to commodities.
Democratization — there is increasing access to information, knowledge, education, and resources. The future will be one with abundant financial resources, energy, food, housing, and education. This is what the internet did for information. The blockchain will unlock this for value — such as money, intellectual property, royalties, rights, and contracts.
Demonetization — innovation and technology should be making things easier, cheaper, faster, more efficient, and as a result, less costly.
Deception — all innovation follows S-curve adoption where early-stage technology goes initially unnoticed, achieves a critical mass, and exponential traction.
This scenario has played out over and over with examples such as the Gutenberg printing press, telegraph, telephone, radio, TV, satellite, desktop computers, internet, laptops, smartphones, and smart devices.
At every step of the way, naysayers scoffed at the idea, said it would never work, or regulation-bureaucracy made innovation more difficult.
Disruption — is when innovation hits a critical mass, when companies hit traction and achieve product market fit.
Prime examples include Google, Apple, Facebook, Airbnb, Uber-Lyft, DoorDash, Coinbase, and Amazon.
Traditional companies saw the signs, failed to adapt, and lost significant market share, oftentimes overnight.
I believe that a similar scenario will play out in the healthcare space.
Why are technology companies best positioned for health care disruption?
Technology companies are best positioned for disruption in the healthcare space due to the following:
Economies of scale — allow greater value and opportunities to be unlocked for greater numbers with greater ease.
Network effects — with greater scalability along with network effects can unleash novel ideas at a scale that have the potential to change the way existing industries do things. With Metcalfe’s Law small incremental changes lead to huge advances (exponential as opposed to linear).
Software — Marc Andreessen wrote a prescient claim that “software is eating the world” in 2011. He predicted that the inherent nature of software companies would inevitably disrupt traditional industries. We’ve seen this happen time and time again from Amazon, Netflix, AirBNB, and other startups.
Artificial intelligence
Automation — with software, robotics, and artificial intelligence, repetitive, easy, low-value tasks can easily be replaced leaving more time for judgment, creativity, complex decision making and higher order thinking.
A constant culture of never-ending innovation, anticipation, and improvement. Tech companies are not confined to a single definition. They are more nimble and able to pivot quickly.
Well capitalized
Less encumbered with bureaucracy and regulation
Access to a stronger labor and talent pool. More and more Gen Z coming out of school are flocking to companies that resonate with their core values, aspiring to make a tangible difference in the world. Unable to find a company that fits, many will choose to start their own companies. The companies of the future will have access to a global talent pool that is more creative, smarter, and open-minded.
The factors above will make technology companies faster, efficient, with lower costs, and higher margins, thus able to make a greater impact at scale, changing multiple industries at once.
The future of healthcare
A conglomeration of factors is acting to challenge access, affordability, and health care quality.
The biggest challengers to traditional health insurance companies are Amazon, Walmart, CVS, Walgreens, and Apple. More could be coming.
In September, CVS outbid Amazon and United Health to acquire the home health data analytics company Signify Health for 8 billion dollars.
In another colossal move, Walgreens’ VillageMD attempting to join forces with Summit Health, is an example of a former retail pharmacy giant making bold moves in order to transform itself into a modern health care company.
These are a few examples where we are beginning to see a shift in how today’s companies are positioning themselves as tomorrow’s leading health care companies.
The traditional model of patient care will shift away from the hospital and more towards ambulatory surgery centers, urgent care, clinics, and the home. Virtual care and telemedicine will allow providers access to a broader patient population and shift how healthcare is delivered. The home will emerge as a place where healthcare is more commonly delivered in the future. The future of healthcare organizations will be forced to evolve.
Health care devices will be connected via the internet of things. Real-time health data will be uploaded and closely monitored via software analytics and artificial intelligence. Healthcare education will be conducted via VR-MR-AR in the metaverse and hardware-software interfaces.
In the end, we will see former health care giants rebrand themselves into tech companies in order to keep up with new challengers constantly entering the space. The best example is Apple positioning itself from a former computer company into a health care and financial services company for tomorrow. Tesla is another example of a technology company that is disrupting the automotive industry by creating electric vehicles. The companies that survive will be the ones that are constantly anticipating the changes in market dynamics and shifting into new paradigms.
Christopher H. Loo is a retired physician and founder, Financial Freedom for Physicians.
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