Disrupt this: ICD-10 one step in healthcare innovation
ICD-10 began this week. While there is no doubt explainer and think pieces have begun populating your social media feed, rest assured that with the new system, you’ll never have “the code that got away.” To add one more story to the till, Healthcare Dive looked over the life cycle, emergence of disruptive healthcare technologies.
As we earlier reported, ICD-10’s implementation in the U.S. has been delayed and complained about ad nauseum -- So much so that some physicians didn’t actually think the transition would actually happen. And yet, not even a potential government shutdown could have stopped it this time.
How this transition affects providers and health systems’ business remains to be seen but it can be assumed some providers, in part to a lack of preparation, will shut their doors. Written in a 1995 Harvard Business Review article, authors state one of the “most consistent patterns in business is the failure of leading companies to stay at the top of their industries when technology or markets change.” Echoing this in 2011, John Dingle, then-senior health systems engineering analyst at the Mayo Clinic, told HIMSS attendees, “The will to win is important, but the will to prepare is vital.”
ICD-10, while less of a voluntary push, does put providers, hospitals, health systems, insurers, etc. in a position to adapt to the new billing climate. It’s been in the works for some time and yet the transition is legitimately costly. CMS estimated the total ICD-10-associated costs in 2013 would reach $640 million. Clinical Innovation + Technology reported in 2011 American Society of Clinical Oncology data revealed organizations of 400 beds or more could expect to spend $1.5-$5 million on the conversion.
So healthcare CEOs, much with any new regulations or tech, must have wondered before Thursday: Is it worth it?
While CMS will reimburse incorrect codes for one year, providers, even if reluctantly, should’ve been preparing for the transition. As noted, those that haven’t will experience some operational as well as financial hits. A sponsored article last year from Wired describes the Disruptive Technology Cycle which outlines such tech adoption from a new toy to a “critical business tool.” While ICD-10 is a coding system, it follows similar properties of the cycle as well as typical phases of disruption within an industry as described in an article by TechCrunch.
- Operational utility / Overconfidence: This is the phase where businesses adopt a regulation or technology to serve a purpose. For ICD-10, the system expands reimbursement codes (quite largely) to pinpoint billing and not lose potential revenue. Also in this phase, disruptive technologies threaten legacy systems in place that were just fine with their clients and how things were, thank you very much.
“This is the time for the incumbents to take action and innovate, but instead they usually ignore the new entrants, or often try to delay them with regulatory actions,” wrote Elad Gil in TechCrunch. While the ICD-10/U.S. story is more about adoption than innovating a product, one example of an incumbent resisting such change at this stage would be the American Medical Association who fought tooth and nail to prevent the ICD-10 transition.
- Splash phase / Sudden Market Loss: This “gimmicky” phase is where the disruption makes a splash with its new feature. As previously reported, ICD-10 drills billing down to almost absurd specificity. “By the time you notice a new technology being featured in publicity stunts, your opportunity to make a splash with it is already over,” wrote Ben Gaddis, vice president of growth and innovation at T3, in Wired. It’s in this phase where a sudden realization occurs that things are not what they once were. The World Health Organization and Sweden adopted ICD-10 in the 1900s while Canada and China quickly followed suit in the early aughts.
- Differentiation / Further Market Loss: While these phases overlap to a certain degree and no clear cut timeline can be given to the nebulous boundaries of trends/adoption, one could argue the U.S./ICD-10 disruption story is between Phase 2 and 3. In the differentiation phase, the technology is taken beyond operations and now a differentiation factor for customer experience. The ability to adapt to and utilize new technologies, regulations will make hospitals and providers look modern, up-to-date and customers will take note. It’s also in this phase where incumbents try to take action but it’s too little too late.
- Commodity / Ongoing Decline: This is where the tech is no longer new and it’s all systems go. It’s no longer novel and businesses are regularly using the tools. Conversely, surrounding this is the ongoing decline of businesses that did not adapt, innovate. “Incumbents may survive for many years post collapse, but are no longer really relevant,” wrote Gil.
One disruption in a never-ending stream of innovation
Rod Piechowski, senior director of health information systems at Healthcare Information & Management Systems Society, sees ICD-10 adoption as part of an evolutionary path of healthcare services.
“I know anyone that has to deal with ICD-10, when you look at the scale compared to ICD-9, might raise some eyebrows using the word ‘incremental’ but with all those choices they will have more granular information,” he told Healthcare Dive. This information will help providers know what conditions patients are experiencing which will allow deeper analysis, which providers have better computational devices to process data.
As technology gets more capabilities, it begins to open up more opportunities for innovation. As an example, he cites the development of anesthesia which led to new surgery procedures, including heart transplant surgery. “When someone lived two weeks after heart transplant surgery, that was front page news,” he said. “You’ve probably met someone with a heart transplant and not even known it. It’s not front page news anymore.”
One of the most recent transformational technologies was the development of faster computational devices. “The rapid ability of industry to create devices that can execute more computations per second and also increasing the ability to store data and process” such data allow for more innovations, Piechowski says.
Computing devices today far surpass such development in the 60s and 70s. “It’s going to change healthcare because we’re going to be able to process more information faster in a way that allows us to do deeper analysis than we’ve ever been able to do before,” he says. Healthcare delivery is a data dependent process and the amount of data that flow can increase exponentially and now be distributed to physicians’ fingertips thanks to handheld smartphones. For example, with mobile computational devices, healthcare’s obstacle of distance and separation has been ripped apart.
“You could never do genomic sequencing with a 1982 IBM PC...These are incremental improvements and innovations on top of previous innovations and you’ll continue to see [that] happen.”
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