2024 Ecosystem Predictions — Northwest Arkansas can be the next innovation cluster for healthcare transformation

Written by Omid Moghadam, Namida Lab, Inc.

TL;DR: The U.S. healthcare system is considered both innovative and inefficient, with reform attempts falling into two categories: limiting access to care or sharing the risk of higher costs with providers. Value-Based Care (VBC), a recent movement, incentivizes keeping clients healthy to reduce overall costs and replace lost fee-for-service revenue. Northwest Arkansas, with its strengths in Consumer Product Goods (CPG), has the potential to lead a healthcare transformation by integrating VBC principles and leveraging its institutions like the Alice Walton School of Medicine and Walmart Health.

Summary

The U.S. healthcare system is simultaneously the most innovative and inefficient healthcare system in the world, producing outcomes inferior to those of healthcare systems of other developed economies. Over the years, a number of reform attempts have been made to slow the rate of increase in healthcare costs. The nature of these reforms can be put into two major categories: (1) limiting access to care, aka “not paying for that,” or (2) sharing the risk of higher costs of care with providers so they will have incentives to keep their clients from getting sicker aka “get paid to keep them healthy.” Limiting access to care has been really bad P.R. and has led to very bad health outcomes, so ‘keep them healthy’ is the only reasonable path forward. A movement that has found purchase in the past few years is Value-Based Care (VBC). 

VBC provides incentives to the healthcare system to keep its clients as healthy as possible for as long as possible, hence reducing overall costs of care while providing revenue to replace the lost fee for service monies. The main paradox of having a lot of healthy people in our healthcare system is that our current system has evolved to efficiently and ruthlessly generate revenue from sick people by moving them Henry Ford style through its opaque processes. To keep its clients healthy, a VBC provider needs to provide a high level of personalized service, and an assembly line is not a convenient place to provide advice, tools, feedback, and plans to the individual. 

A successful value-based system will transform healthcare from its current state into something akin to a Consumer Product Good (CPG). In the CPG business, consumers can reward innovation and quality and punish poor performance by easily switching their consumption to superior providers. Needless to say, none of these are widely present in the U.S. healthcare system. CPG companies build leveraging data analytics, focusing on customer experience, adoption of lean design principles, continuous feedback loops, price transparency, continuous improvement, and innovation in every aspect of their business. As a result, they can anticipate consumer needs while aiming for higher consumer satisfaction.

If successful in this transformation, a VBC system will incorporate understanding client needs and preferences, empathetic design thinking, co-creation of services with clients, personalization of care, feedback loops, integrating technology thoughtfully, evaluating performance, and measuring success into every aspect of their offerings.

Because of the strength of Northwest Arkansas in both CPG and CPG-adjacent fields, such as logistics, one can imagine a healthcare transformation, intellectual movement, and innovation wave stemming from here. The necessary pieces that have come together are as follows:

• Alice Walton School of Medicine focusing on training a new generation of physicians focused on Whole Person Health. 
• Whole Health Institute, a think tank providing intellectual fodder and proof of concept projects such as VBC. 
• Walmart Health, a retail healthcare provider designed with transparency, convenience, and customer satisfaction in mind, and large enough to withstand financial and regulatory challenges of a new healthcare model. 
• Northwest Arkansas Council, a forum where stakeholders can participate in the planning and design of the new system.

The missing piece is sufficiently large enough risk capital to fund innovative ventures that provide the technical and scientific tools that make this transformation possible.

In summary, adopting value-based care in the U.S. healthcare system will make it consumer-oriented, focusing on quality, efficiency, and client satisfaction, much like the consumer product industry. Northwest Arkansas, with its expertise in CPG, can be the platform that proves the concept as well as the launchpad for the next generation of companies that will scale the model nationally. 

ChatGPT Q&A

Q: How can we implement user-centered design in designing consumer focused healthcare in the U.S.?

A: Implementing user-centered design in consumer-focused healthcare in the U.S. involves a multi-faceted approach that puts the needs, experiences, and perspectives of clients at the forefront of healthcare delivery. Here are key strategies to achieve this:

Understanding Patient Needs and Preferences, empathetic Design Thinking, Co-Creation with Patients, Personalization of Care, Feedback Loops, Integrating Technology Thoughtfully, Training Healthcare Professionals, Evaluating and Measuring Success.

By focusing on these strategies, healthcare in the U.S. can be transformed into a more consumer-focused, efficient, and compassionate system that prioritizes the needs and experiences of its patients.