In the wake of the explosive use of activity trackers, smartwatches, and other consumer health wearables, three business school professors have asked the ultimate question. From a competitive perspective, does incorporating patient-generated health data into clinical workflows increase or decrease provider profits?
To answer this question, the researchers applied what is known as “game theory.” This is mathematical modeling that examines how different actors (in this case, competing health systems, consumers, and technology companies providing data integration platforms) are likely to react in different scenarios. . It's an approach regularly applied to business decisions, legal strategy, and warfare.
Game theory should not be confused with simple logic. Zafar D. Ozdemir, a professor of information systems and analytics at the Farmer School of Business at Miami University in Ohio and one of the three researchers, said the simple logic is clear. Ta. It’s about leveraging health data to improve patient outcomes,” Ozdemir told me.
Game theory, on the other hand, involves complex mathematical formulas that would be published in magazines. Journal of Theoretical and Applied Electronic Commerce Research, which makes it the type of Google Scholar source that pops up in my email regularly. Fortunately, the paper contained enough plain English that I reached out to Ozdemir and his colleagues to better understand what they had discovered.
Although this paper assumes that providers are paid on a fee-for-service basis, actual payment data confirms that this payment structure remains the dominant payment structure. The paper also assumes that consumers are interested in sharing their health data with their doctors, a position found by an astonishing 91% of respondents in the October 2023 Consumer Wearables Survey. I support it.
The scenarios the researchers considered included proprietary platforms that providers, consumers, and, in some cases, consumers could use to feed wearable data, such as the discontinued Amazon Halo. In this paper's baseline case, it would be economically advantageous if none of the competing health systems were integrating patient-generated health data either on their own or using a platform. No one provider has a competitive advantage, and any provider can avoid the costs of data integration and monitoring.
In other words, existing stakeholders will be fine as long as they do not disrupt the status quo. Just imagine.
However, larger health systems have a larger patient base on which costs can be spread, and may therefore gain a competitive advantage by uniquely integrating patient-generated health data. “It increases our attractiveness as a destination and improves the perception that we are taking care of our patients,” Ozdemir said.
Still, smaller health systems are likely to feel forced to follow suit, resulting in new patient acquisition even as all providers spend more money. There is a situation where this is not possible. Or, as the paper states, “the benefits of PGHD adoption are fully absorbed by consumers.”
But what if there's a third-party platform that consumers can feed in all their data and providers can use to integrate the data? Here's where the question arises. The researchers hypothesize that when third-party platforms are involved, consumers lose some of their “welfare benefits” because they become more concerned about privacy. (Privacy concerns were certainly prominent in his 2023 consumer survey mentioned above.)
On the other hand, having your data on an external platform makes it easier to switch providers. That's a prospect that worries the largest health systems, but is attractive to smaller competitors. As a result, smaller providers will be more eager to join cloud-based platforms, while larger companies will have to be tempted by attractive pricing or be pushed by consumer pressure, Ozdemir said. said.
“We can't afford to be left behind, especially given the changing expectations for younger generations growing up in technology,” he told me. “Regardless of the benefit argument, the integration of patient-generated health data will be forced. But they will try to work it out in their best interest.”
Is a provider's “best interest” the same as a consumer's? What will tech giants like Amazon, Google, and Epic do? Researchers warn of “monopolistic practices,” and legislators and regulators It urges companies to be aware of security and privacy risks posed by third parties. They also point out that “expert views on high-quality health apps may not reflect patients' views.”
“When it comes to patient-generated health data, everyone should be interested in delivering better health outcomes at as little cost as possible,” Ozdemir said. But of course, in the real world, “a lot of the question is who controls the data.”
It remains to be seen whether consumers themselves will win that game.
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