The recently signed healthcare reform legislation is "extremely complex, extremely expensive and negative for insurers" and the effects on small business are "not clear," according to Thomas Hodapp, CEO of Access Capital Management.
With the infrastructure not in place today to execute, Hodapp told attendees at the Health Technology Investment Forum last week: "The greatest difficulty will be in the implementation."
Although it will take several years, the eventual winners are generics and healthcare IT. Hodapp predicted significant growth opportunity over the next three to five years, but the large health IT vendors will continue to control the market, he said.
Three forces are driving the transformation of the healthcare industry, he said. Regulatory reform is changing the industry structure, technology is creating a revolution in healthcare delivery and personalized medicine is disrupting the practice of medicine.
In conjunction with all these changes, payment models must move from fee-for-service to pay-for-performance and bundled payments to get the benefit of the transition, Hodapp said. These changes require capital, established leadership positions in the marketplace and collaboration among physicians, hospitals and payers, he said.
Hodapp called software-as-a-service (SaaS) business models, cloud computing, social networking and mobile applications game changers. He held up Kaiser Permanente's Blue Sky vision, with home as the hub of care and fewer physician visits, as being the wave of the future. Genomics will offer up cost-effective, predictive treatment plans and emerging Health 2.0 tools will address preventive care. Smart search tools will deliver information that will enable patients to educate themselves.
The iPhone will lead the way to the mobile future, creating a shift to the home market, Hodapp said. Medical home delivery for the chronically ill is patient-centric and logistically complex but provides the greatest opportunity for savings in the industry, he said.
Although adoption is currently low, electronic medical record systems will soon become highly commoditized. "EMR usage is growing and has the potential to radically transform record management," he said.
Technology and the marketplace need to focus on driving down cost. This is where technology-assisted niche businesses can play a significant role - such as developing algorithms for search in the subrogation business and developing quality assurance systems for hospitals for the construction industry. "These are not on the high end of valuation, but be diligent and look where others are not," he advised.
"We're at the tipping point," Hodapp said. While new technology adoption in healthcare is inherently slow, this time things will be different - unprecedented - with the government stepping in to underwrite and redesign the infrastructure, he said.
