Can A New Technology Change The U.S. Healthcare Industry?
While people are getting used to progress and the faster pace of life, industries are looking to innovate and provide potential clients with leading-edge services. In the world of Uber, Amazon or AirBnB, can American healthcare stay behind?
The healthcare industry is desperate for innovative solutions relating to its technology, delivery and business models. There is an urgent need for a solution that will benefit both clients as well as industry players.
In today’s competitive world, innovative products and superb customer experience are the prerequisites of customer satisfaction. Customers have become more demanding when it comes to services and take greater care, especially regarding their most precious possession: their life.
Although competition in other consumer-driven markets has led to decreased cost and overall quality improvement, the fragmented nature of the organizations providing healthcare coverage, mainly insurance companies and employers, as well as the fragmented nature of the delivery network have not yet created the right environment in which suppliers compete for the overall value of healthcare and where the end result is better care at lower costs.
According to JAMA, there is an estimated $1T of waste in the US healthcare system, making it the world’s most expensive health system per capita. One of the main sources of waste is the complex administrative operation of multiple networks and payers as well as the lack of standardization in information technology. Another major bucket is the unwarranted variation in healthcare delivery, driven mostly by low value care and over treatment.
The federal government is able to control development, pricing and the quality of services in the health insurance marketplace with the help of programs such as Medicare and Medicaid. Nevertheless, since these programs only relate to a specific part of the population (Medicare covers retirees and Medicaid covers patients who are unable to pay the coverage fees), the majority of the population, mainly people under 65, who either work or get coverage from their parents, are getting their care out in the free market. But is the free market really free?
Is the free market really free?
Under the current “fee for service” system, since providers can provide any type of care at any price, the system turns out to be very expensive for both employers and patients while not always profitable for many providers.
When Oron Afek, co-founder of Vim, investigated the American health insurance arena, he immediately identified lack of innovation as a key problem. “I think that Apple brought to the world an unprecedented experience that integrated software and hardware. I look at leading high-value providers, the ones who are really good at delivering better healthcare at lower costs with more efficiency, and it reminds me of Apple Iwallet that seamlessly connects the payer and the provider, creating seamless referrals, prior authorizations, scheduling, etc’.”
Inspired by how efficient marketplaces have been scaling in other industries such as hospitality and commerce, Afek decided to tackle one of America’s challenging industries: together with his two Israeli co-founders, Asaf David and Yael Peled, he created Vim, which builds an operating system for healthcare networks, allowing payers and providers to collaborate and form value based care networks on a large scale.
Late in 2015, when the company was first established, it could not get much traction among the larger insurance players because of its size and lack of experience, so the team looked to pilot with a large, innovative employer.
Barbara Wachsman, who was the director of healthcare benefits at the Walt Disney Company and a healthcare thought leader, agreed to work with the team to design multiple programs to drive better care at a lower cost, while improving the employee experience and productivity.
“The Vim team had an unprecedented ability to quickly innovate, learn and power meaningful healthcare interactions between our employees and high value healthcare providers,” said Barbara.
Vim founders, Oron Afek & Asaf David.
The company has raised close to $40m to date from Sequoia Capital (Israel), GreatPoint Ventures and some of its largest customers.
Today, Vim works with payers and providers to leverage data and connectivity, to identify the ideal provider for a patient at a given moment, and to create a match. “More precisely,” Afek explains, “it acts as the connective tissue between payers and providers and relies on payer and provider data and insights to determine the most efficient, high quality, accessible provider for any patient at any time. By helping to drive utilization of high value care, we can reduce unwarranted variation. Consequently, patients are able to access more affordable care while high value providers are rewarded for their great work.”
Innovative Technology Leads To Better Healthcare
Remaining in the background like companies such as PayPal, Stripe and others, Vim works to power different interaction points where patients make decisions, leveraging search algorithms and a unique online scheduling technology. At this point, the system powers call centers, online doctor finder tools as well as physician EMRs to embed the right recommendations.
Five years have passed since the company started operating in the U.S.; It now has offices in Tel Aviv, San Francisco and Boulder, Colorado. The company continues to grow and to make an impact in the healthcare industry. Together with its health provider partners, which are mainly the largest local healthcare companies, it has now expanded its activity to 20 of the largest U.S. metropolitan areas.