Putting Healthcare on a Platform

Kim BellardPeople in healthcare have been speculating for years about who or what will be the "Uber of healthcare." Uber shocked the transportation industry with its peer-to-peer business model, slick technologies, and almost blithe disregard for numerous regulations that might have dampened its model. Certainly, many thought, the creaky, inefficient healthcare system was vulnerable to disruption from a similar outsider, perhaps even Uber itself (UberHealth, after all).

So I found it amusing that it turns out that Uber has aspirations itself; it wants to Amazon. Uber is doing its road show in preparation for its IPO next month, which is expected to raise as much as $91b. The New York Times quotes CEO Dara Khosrowshahi in an Recode interview last year as saying: "We want to kind of be the Amazon for transportation." In another interview last summer, he elaborated on this goal:

Cars are to us what books were to Amazon. Just like Amazon was able to build this extraordinary infrastructure on the back of books and go into additional categories, you are going to see the same from Uber.

Uber Eats is touted as an example of this kind of opportunity, and Uber hopes that Uber Freight will have similar success. The Times also cited their efforts in scooters, autonomous vehicles, and payment infrastructure as other opportunities.

Shawn Carolan of Menlo Ventures told the Times: "Because the ubiquitous need for transportation is so huge, they're able to cross-sell different products to their existing customer base." Another VC, Mitchel Green of Lead Edge Capital, was also effusive: "Uber, like Amazon, operates with an obsession on customer value over anything else."Of course, cynics suspect the Amazon comparisons are an attempt at a financial sleight of hand. Uber's growth is impressive, but shows signs of slowing, while its losses are mounting -- as much as $1b in the first quarter alone. Amazon was famously unprofitable for many years, as it invested in growth and infrastructure (such as its cloud service AWS), and Uber would like investors to show similar patience.

Leading tech companies -- not just Amazon but also Alphabet, Apple, and Facebook -- have established themselves as platforms for a range of products and services, which allows them to build success upon success and further entrenching themselves into customers' lives. Business platforms create value through network effects, connecting two groups of users -- consumers and suppliers, consumers with other consumers, businesses with other businesses, etc.Uber is already a platform connecting riders and drivers, and it is a platform that can expand by doing more things for riders with more kinds of transportation options. The thing I keep wondering about is: where are healthcare's platforms?

Healthcare, especially in the U.S., is known for how complicated (and expensive) it is. People -- patients/consumers -- have a hard time finding the right treatments, the right health care professionals and organizations, and the right price. Even communication is difficult in healthcare; faxes are preferred over emails and texts, waiting in line or in a phone tree can be maddening, and terminology is too often opaque, such as on bills or insurance "explanation of benefits."

Healthcare needs platforms.

Some are calling for "Medicare For All" -- whatever that means. Others might prefer, say, Kaiser Permanente for All, or Mayo Clinic for All. But those aren't platforms, and they wouldn't address many of healthcare's underlying problems. Done right, electronic health records could be -- or could have been -- a platform. Expand the kinds and sources of information collected, make them more useful to consumers in their daily lives, introduce more interfaces (e.g., telehealth), and they'd start to look like a viable platform. Unfortunately, neither healthcare professionals nor patients are enamoured of the current EHRs, which have often been seen as being more about billing and more about intra-organization than about a broader perspective of our health.

Apple is certainly thinking about life as a healthcare platform. Its Apple Watch is already has an ECG app that can be used to detect Afib, and it is working with a growing number of health organizations that support sharing health records on the iPhone. Earlier this year CEO Tim Cook said: "if you zoom out into the future, and you look back, and you ask the question, 'What was Apple's greatest contribution to mankind,' it will be about health."

Similarly, Amazon seems to have plenty of healthcare ambitions, including its acquisition of PillPack and Haven, its joint venture with JP Morgan Chase and Berkshire Hathaway, to name two of many. Alphabet has an array of healthcare-related efforts and investments, and Facebook is exploring the space.

There are going to be platforms in healthcare. The question is whether they will come from outside healthcare, or from within.

In additions to EHRs, telehealth companies could be a logical basis for a platform, connecting patients and healthcare professionals in a variety of ways and a number of business models. There are services like ZocDoc (patients and doctors) or PatientsLikeMe (patients and patients) that have platform potential. But, so far, they are all mostly staying in their lanes.

What remains to be seen is:

• who has the technology to really simplify healthcare?
• who offers the experience that wows users?
• who can quickly generate the kind of network effects that serve to accelerate growth?

Right now, it's not clear that any organization -- in or out of healthcare -- can yet demonstrate clear superiority in those dimensions.

Healthcare wants to be more like Uber. Uber wants to be more like Amazon. Amazon wants to be part of healthcare. Someone, somewhere, sometime will somehow break that circle and healthcare will have the platform(s) it needs.

We're waiting.