CHAPTER 3

Everything Is Changing

There are times in history when new technologies emerge and change how we do everything:

• • How we do our jobs,
• • How we do business, and
• • How we compete in the marketplace.

The steam engine is one such technology. It created the modern factory and changed how people worked. It also opened new markets due to new distribution capabilities that created new multinational conglomerates. Since companies were not constrained anymore to their local markets, they grew internationally.

The microscope is another piece of technology with a profound social and economic effect. It allowed researchers and medical professionals to see things that they could not see with their eyes, leading to the discovery of new targets for treatments. In turn, this created an enormous supply of new treatments and big pharma. Today companies are building even larger microscopes in search of more targets at a more granular level. As the lead researcher on the development of an extremely large microscope at University of Strathclyde in Scotland says: “You are studying a world which doesn’t even obey the same rules of perception.”1

Big granular data, that is, data collected in milliseconds, seconds, and minutes, contains patterns, shapes, and trends that cannot be seen by the human eye. But when algorithms reveal to business professionals the insights contained in the raw data, it becomes a source of new data-driven products and data-driven business models. It creates a supply of new goods and services delivered by new digital giants.

How can data be the raw material for such growth?

Let’s Eliminate Heart-Related Sudden Deaths

Do you know that 50 percent of sudden deaths are caused by heart related conditions? And 80 percent of them are preventable …

—said Ivo Datchov, the CEO of a small startup, Check Point Cardio (checkpointcardio.com).

He then handed me a newspaper clip from the Bulgarian press.2 It told the story of a 61-year-old person with a heart condition who experienced a medical condition while waiting to board a plane.

“This condition occurs for 3–4 minutes and the patient may be completely unaware of it. If the symptoms are not caught in time, it leads to certain death.”

Fortunately for the patient, he was wearing one of Check Point Cardio’s remote monitoring devices. The device detected the symptoms in real time, sent the patient’s ECG and other vitals to the data center, and alerted the personnel at the remote diagnostic center about the medical emergency. A physician reviewed the data streams from the device, assigned a diagnosis, and called the patient to instruct him what to do until he was picked by an ambulance 30 minutes later.

Ivo explained to me that the company was founded because of a very passionate cardiologist working in a hospital in Kazanlak—a small town located at the east end of the Rose Valley in Bulgaria. During his tenure the cardiologist observed that many cardio-related deaths occur after patients are discharged from the hospital, return to their natural living environments, and resume their normal daily routines. In many cases the patients do not even feel the symptoms of deteriorating conditions, and thus, they cannot seek help from their physician. If patients could be monitored remotely for the occurrence of adverse symptoms, and if the changes in the patient’s condition could be communicated immediately to a cardiologist specialist, many deaths would become preventable.

As Yuval Harari points in his futuristic book “Homo Deus,”3 because of technological advances many deaths today are viewed as technical error. Cars do not have the right equipment to prevent deaths, patients are not equipped with the right monitoring devices, and many more. The team behind Check Point Cardio thought in the same way.
The limitation was in the monitoring technology and not in the treatment. They knew that a practical solution required patients to be monitored 24/7 in their natural environments. If patients are kept in the hospital too long, the cost is too high. If they were discharged without remote monitoring, they were at risk. Thus, sudden cardio-related death is a technical problem.

Check Point Cardio’s first device was a 140-gram wearable monitor. It monitors 12 channels of ECG, pulse, blood pressure, respiratory activity and the bodily movements of the patient. The device tracks every movement of the patient and his or her exact location in case of emergency. Monitoring all these vitals simultaneously provides enough information for hospital-grade clinical diagnosis. For example, the correlation between blood pressure and ECG measurements produces very reliable signals for detecting many deteriorating heart conditions.

Many interesting innovations are packed in this tiny device. The ability to measure the blood pressure of a patient in motion in real time without a cuff is an impressive achievement. It is impossible to measure blood pressure with a cuff while someone is running or sleeping. The team guards the secret about how they do the blood pressure measurements as tightly as the Coca-Cola formula is being guarded. Equally important and impressive is what they do with the data.

The device collects 250 measurements per second. This is 15,000 data points per minute per measure, 900,000 per hour per measure, and 21,600,000 points per day per measure. To put this into perspective, an Excel can analyze only one hour of this data as Excel can load up to 1 million data points. The data packets collected every second have to be sent over the Internet to remote monitoring centers without any loss of information. Any loss of information makes the diagnosis more difficult or impossible. The human body produces a lot of noise that clutters the signal and makes diagnosis more difficult. A body in motion produces even more noise and thus makes remote monitoring in natural environments more challenging. It is the data scientists who use specialized algorithms to surgically remove the bodily noise from the data. Finally, the data is visualized and algorithmically annotated to direct the physician immediately to the most relevant segments in this enormous time series sequence. A three-minute symptom generates a long time series sequence of 45,000 points that is hard to explore with the naked eye. But machines and algorithms can explore every detail of sequences of any lengths and augment the human eye in the detection of medical pathologies in the same way the microscope does in the detection of targets.

Check Point Cardio’s vision is not just prevention but also better health care for patients. Living in your natural environment risk-free is better than living safe in a hospital. This improvement in patient care is obvious, but what is less obvious is how such technology and data change the business of health care.

Jobs Are Changing

Technologies like Check Point Cardio’s remote monitor fundamentally change how physicians do their jobs. In traditional health care the patient is examined physically by the doctor. Both the patient and the physician are in the same room. Even if some monitoring equipment, such as a stationary ECG recorder, is used, the exam is confined to a physical location and a specific time frame. This is no longer the case. The patient can be anywhere—at work, at home, on the road, and so on.

The fact that the patient is not confined for examination and treatment to a physical location has enormous social and economic benefits. People can return to work faster and be cared for at their homes, which saves hospital and other costs, and provides emotional support. But it changes the relationship between the patient and the doctor.

First, doctors are used to examining and diagnosing patients in person. They ask questions, perform physical exams, feel how the patient feels, and make judgments based on the soft signals that they get from patients. Sensing soft cues during an in-person medical exam is what physicians rely on to ensure that the diagnosis is accurate and that they have not missed important signs of other conditions.

In the future remote health monitoring will reduce the need for physical exams. The missing soft cues that aid the physician’s intuition during a physical exam will be replaced by granular data on vital signals and symptoms. Instead of guessing from cues, data collected at 250 milliseconds will provide the doctor with a much more factual picture of the person’s health and medical conditions. Unlike the human brain, algorithms can sift through tremendous volumes of information to ensure that all possibilities are accurately assessed and considered. Consequently, physicians will have to hone different skills. Instead of developing a sense for soft cues from patients, they will develop skills to sift through data and analytics quickly to diagnose and treat patients remotely. It must be noted that intuition is a practical guide to decision making only in the absence of complete information. Today’s monitoring systems are evolving quickly to collect ubiquitously all the data required to make decisions.

Second, the patient/doctor relationship will change because it will no longer be structured based on periodic scheduled visits. Because of the 24/7 real-time monitoring, the relationship becomes continuous. The doctor is now available on demand 24/7 because the remote monitoring device can alert them at any time about changes in the patient’s health conditions. The transition from scheduled visits to on-as-needed care improves the outcomes, saves time, and ultimately allows physicians to deliver care to far more patients.

In this section I used the example of remote health monitoring to illustrate how technology and data change the medical profession. But data-driven devices and processes will change every job in a similar way. The new condition-based maintenance (CBM) models for industrial equipment are conceptually the same as the remote health care model. CBM allows companies to transition from scheduled maintenance to conditioned-based as-needed maintenance to save time and costs.

The fundamental job changes come for two reasons. First, decision makers will not have to be present at the action site in order to make decisions and change the outcomes. Like doctors, factory managers, mining managers, and many more engineers can control the outcomes in their production processes remotely. Second, decision makers will not be forced to make judgment calls on incomplete information. Their expert knowledge will be augmented with granular data analytics similarly to how we use other tools to aid our activities.

Business Models Are Changing

Insurance companies typically reimburse doctors, hospitals, and other patient care centers for patient visits and hospital stays. Doctors and nurses are also reimbursed for any in-person visits to patients at their homes. These are a pay-per-visit and pay-for-stay business models.

My first experience with remote medical care was 15 years ago when my daughter was growing. Our pediatrician often gave us advice over the phone in order to save us a trip to his office. When I called to schedule a visit, I often could hear him asking his nurse: “Ask them what it is about?” If it turned out to be something small and trivial, he would grab the phone and tell me: “Why waste an hour in traffic when I can tell you exactly what to do now?” I always appreciated him saving me the trip, especially after long office hours and during weekends. But he never got paid for his remote advice. It did not matter how much time he spent on the phone or how many calls he got from me about the same issue. At the time insurers did not consider such remote guidance to be true medical care, even though our doctor cared both for my daughter’s health and for my convenience and time. As the times are changing, some insurance companies are starting to pay for phone and e-mail medical advice, but it is still not the norm.4

The remote monitoring technology changes the pay-per-visit model to a subscription model as service is being provided continuously. The patient pays the subscription for as long as he or she is being monitored. The pay-per-visit model is discontinuous and, thus, has many drawbacks. Most importantly there are information gaps between the different visits. What has happened in-between is anecdotal. The information provided to the physician is whatever the patient remembers or wants to tell the doctor. Many conditions remain unnoticed, too, as they can only be detected with sophisticated equipment. Those gaps of information are the most common cause of deteriorating medical conditions and even sudden death.

The subscription model delivers uninterrupted continuity of service. When continuity is built into the business model everything becomes easier and predictable—the care, the business revenues, the planning for resources, and much more. Sensors and other data collection technologies allow for the building of data-driven business models based on continuous service. There are many other data-driven business models that rely on a continuous supply of information but the service itself is not continuous. The short-term rental business model pioneered by Airbnb relies on a continuous supply of information about the available properties,
the quality of the individual properties, the prudence of the renters to ensure trust in the supply and demand network, and so on. Because data can be used in many ways, it presents an opportunity to create many different data-driven business models. In this sense the analogy that “data is the new crude oil” is true. There are over 150 different products made of petroleum and the list keeps growing as new inventions are created.5 The list of data products is even larger and is growing at a faster rate.

Market Competition Is Changing

The ability to provide reliable, uninterrupted, real-time care remotely allows companies to create remote monitoring and diagnostic franchises. These franchises can take care of a lot more patients than hospitals can. They can be located anywhere and even outsource to low cost countries. Essentially, the technology makes it possible to outsource components of medical care in the same way as other technologies have made it possible to outsource customer service and call centers.

For certain services we place higher value on the in-person versus remote service. This has been especially true of health care. However, the attitudes are changing. The health care system is overloaded and understaffed. People hate the long waiting time in hospitals and physicians’ offices. They also hate to be restricted about where and how they get service. People value their time and mobility more than the in-personal service and this will drive the wide acceptance of remote care. At the end of the day, a visit to a hospital is not a social engagement, it is a need and if the trip can be saved without compromising the quality of the service, both the patient and the physician will be better off.

The competition is changing because the remote franchises will put enormous competitive pressure on traditional hospitals and health service providers. These new business models compete directly with the traditional providers for patients and revenues. As the cost of remote monitoring continues to drop, the franchises will start competing with the family doctors for the delivery of routine health checks. Companies like Check Point Cardio are working to embed sensors in undershirts, so that even healthy people can be monitored 24/7. Such wearable devices will turn the current way of scheduling doctor’s appointments upside down. People will not go to the doctor when they feel discomfort. They will be called with a diagnosis and treatment prescription even when they do not feel any symptoms.

Technology always has an impact on the market competition as it gives companies a competitive advantage. Car manufacturers are constantly innovating to gain competitive advantage and market share from their rivals. Building a better mouse trap is a strategy to temporarily outperform your competitors. It is like playing tit-for-tat. If Ford has a better model today, next season GM will release the new newsmaker model. But when new technologies facilitate the creation of new business models, the competition is not about building a better mouse trap; it is about building better institutions that make the old institutions obsolete.

Adaptation Is Survival

When new business models disrupt the institutional structure of the market, change and adaptation are the only viable strategies. The resistance to change during times of high disruption is because many managers see the new market competition as a zero-sum game. The remote patient monitoring and diagnostic centers will be the winners and traditional hospitals and family doctors will be the losers. The new entrants are perceived just as low-cost providers that cannibalize the revenues of the traditional health care service providers.

This kind of thinking is a remnant of the old physical economy mindset. If resources are limited and finite, the ownership and control of resources is a zero-sum game. If we change the focal point, we can see that continuous 24/7 monitoring provides more opportunities for more diversified services. As it extends from patients to healthy individuals, it in fact increases the market for health care services dramatically. Instead of less, all participants in the health care industry end up with more opportunities. It is just a matter of plugging all organizations into the data stream so new opportunities and services can be developed faster. And the biggest winner of this data-driven ecosystem are the patients who are saved from sudden deaths.

---