Gaps and Opportunities in HealthCare System

Gaps and Opportunities in HealthCare System


The U.S. Healthcare industry is disruptive, in whatever way, the same is flexible enough to innovation. Though the annual expenditure of Americans on health care far exceeds that of other allied nations, the U.S. Healthcare industry is ineffective in delivering quality patient care at affordable prices covering most of the population. This article describes the transition in healthcare industry after the enactment of Affordable Care Act and the opportunities that a healthcare entrepreneur can benefit from a broad market, at the same time ensuring that the consumer receives cost-effective, quality care. The development of the healthcare industry is providing opportunities to healthcare entrepreneurs to innovate the business models to meet their professional goals and also the demand of consumers effectively.


Data analytical tools, Affordable Care Act, Co- pays, and Deductibles, Quality gap, Concierge medical clinics, Skill gap, V-Cap.

At a Glance

  1. Introduction
  2. Information technology
  3. Opportunities in IT
  4. Insurance coverage
  5. Opportunities in insurance coverage
  6. Quality of healthcare
  7. Opportunities in quality improvement
  8. Skill gaps and quality
  9. Summary


“A setback is a setup for a comeback”. As stated correctly by Eric Thomas, healthcare industry also made a remarkable comeback with immense opportunities driven by the gaps, yielding extensive market, that seem attractive to healthcare entrepreneurs.

The U.S. Healthcare system is fragmented unambiguously. The estimates recommended by The Institute of Medicine suggest an average wastage of $750 billion per year by U.S. Healthcare system equivalent to the budget allocated for Defense or Bank Bailout in 2008. By the same token, a survey conducted on healthcare performance by Commonwealth Funds in 2014 ranked U.S. Healthcare at 11th position. These statistics reflect the need for repairing The U.S. Healthcare system.

The federal government made a decent attempt to reform healthcare industry by initiating The Affordable Care Act to make the healthcare more accessible and affordable to a broad range of Americans. Though the third open enrollment period of the law commenced from 1st November 2015; the uncertainty regarding the success is still debated, but the impact on small healthcare entrepreneurs and allied industries has proven beneficial.  

The statistics published by PWC based on 18th Annual Global CEO Survey claim that 67% of CEO’s believe there are better growth opportunities in Healthcare industry at present than three years ago.

Information technology

A study conducted by Pew shows that seven out of ten Americans track their health data, but only one among them shares it with the physician.

The divide in U.S. Digital Healthcare system is due to lack of interoperability that prohibits the physicians from making patient-centered decisions, delivering preventive care, exposing medical breakthrough, and providing continuing care to high risk patients. Bridging the interoperability gap can save healthcare industry $30 billion per year.

The impact of HIPAA Omnibus, Blue Button, HL7, etc. has condensed the individual operating entities generating isolated patient data.

List of successful investments in digital health interoperability

 Name of companyInvestment
Kaiser PermanenteVirtual visits improving patient engagement
My health managerDevelop population strategies
Palo Alto Medical FoundationDevelop new preventive care models utilizing data from remote patient monitoring devices

Based on reports published by Deloitte in 2013, 73% of physicians believe that the quality of patient care can be improved by applying healthcare-IT to collaborate with patients. According to the Department of Health and Human Services, a 20% surge in health IT jobs is estimated by 2018.

The need for preventive care and monitoring of self-health is driving health-tech entrepreneurs to plunge in healthcare-IT startups. Both the patient and physician’s keenness in utilizing wearable technology that could be a part of mainstream healthcare-IT market is also appealing to the technology entrepreneurs.

An estimate by Rock Health gives a clue of $102 million investment in developing new devices such as tracker of heart rate of patients, blood pressure cuffs to measure blood pressure, glucometers to measure blood glucose, smart Wi-Fi scales, and pulse oximeters.

                     Successfully quantized self-help devices available in the market lead

            Device                 Function
FitBitKeeps track on distance, sleep cycle, and calories burnt
GymPactKeeps accountable connection with co-exercisers
WellnessFXCollects tri-monthly blood samples to keep track of progress
FooducateGuides us in grocery shopping to pick up healthy food
CrossBitMakes exercise socially connected, fun yet challenging
Simplee, CoPatientKeeps track on medical expenses
Wello,  Yoga TodayProvides online fitness trainers

According to the reports mentioned by The Department of Health and Human Services, the number of hospitals profiteering healthcare-IT has doubled since 2012, aided by an investment of $20 billion. The shift of physician office models from paper-based to digital systems after the passing of Health Information Technology for Economic and Clinical Health (HITECH) in 2009 swept investments in healthcare providers. Care Cloud and Practice Fusion are some popular software’s implemented in hospitals.

Opportunities in IT

  • The supposition that telemedicine is going to be a vital aspect of delivering care in near future is drawing the attention of healthcare-IT entrepreneurs to utilize the prevailing situation. Such communication technologies are gaining popularity for a safe and secure exchange of healthcare information and data globally also patients in rural areas can communicate with the physician through the internet.
  • The Robert Health Technology reports that 36% of healthcare companies are deficient in mobile strategies that could be overcome by investing in digital health clinics.
  • Data and analytical tools will prove to be an asset for the physician as they provide an easy method of accounting and budgeting. Investment in gathering big data can prove to be an advantage to the physician regarding research, monitoring, and customizing care.
  • Healthcare-IT startups such as Evolent are willing to invest in population health management software that can assimilate date from various sources to assess the level of risk in patients and suggest treatment options specific to that patient.
  • The two clauses in Affordable Care Act related to the biotech industry are captivating the investors. The government is providing tax subsidies along with simplification of few regulatory landscapes to small biotechnology companies.
  • Companies such as InTouch Health and VGo are keen to develop Robotic Kiosks that have a camera, display, and touch screen mounted to act as care coordinators to help healthcare providers by interfacing with other devices such as blood pressure cuffs.

Insurance coverage

It is estimated that 11.7 million people have signed up for Obama care in open enrollment held in February. Based on the survey conducted by Transamerica Centre for Health Studies, there is a downfall in the number of uninsured Americans from 22% to 15%.

The ACA Medicaid expansion is aimed to provide insurance coverage to the uninsured adults in a low-income group who cannot purchase coverage and limited access to employer coverage group. On the other hand, by the Supreme Court decision in 2015, 20 states decided not to expand the Medicaid. This created a huge coverage gap of 3.1 million individuals who possess incomes above the eligibility limit of Medicaid but below the lower limit of marketplace premium coverage.

A study conducted on the individuals under insurance coverage gap reveals that nearly half of them opine that their health is in excellent condition whereas, one-fifth of them are likely to have medical problems requiring attention. Women account for nearly more than half of the individuals under coverage gap because women are in the majority among the poor, uninsured population in states that did not expand Medicaid.

Among the 3.1 million persons in the coverage gap, 39% of them are unemployed, and 61% of them are employed. Out of 1.5 million employed individuals under coverage gap, 47% of them are employed in small firms of workforce less than 50 employees that are out of the jurisdiction of ACA penalties for not offering insurance coverage.

Assessment of coverage gap by age

                   Source: Kaiser Family Foundation analysis based on 2015 Medicaid eligibility levels

Distribution of coverage gap based on ethnicity

                 Source: Kaiser Family Foundation analysis based on 2015 Medicaid eligibility levels

Opportunities in insurance industry

  • Entrepreneurs are pairing with technology experts to innovate the health insurance business models. Oscar is one such health insurance company through which users can pull insurance quotes and also cash by keeping track of fitness to reach the goal. The users are provided with “doctor on call” to access a physician on the phone, video calls, or e-visits.
  • Preferred Provider Organization is a benchmark in health insurance model. This model allows the consumers to choose from lifestyle based precise options that provide risk assessment and health- saving models, rewards and incentive programs, coaching and navigation programs, and alternative networks. The consumers will benefit from converting health engagement into rewards.

In recent times, many insured individuals are unable to afford the cost-sharing involved in reimbursement of care. This underinsured group having low-cost coverage with high deductibles and out-of-pocket cost for hospital stays whose plan may not be reimbursed in case of a pre-existing condition are the new trends in the coverage gap.

  • Copays and deductibles are the best available solutions to bridge the coverage gap caused because of underinsurance. The increment in the deductibles from 10% in 2006 to 41% in 2014 along with the implementation of “Cadillac tax” on health plans valued above $27,500 for families in 2018 is expected to reduce the healthcare spending.
  • Both insurance company and insurers are exploring new economic models that provide reimbursement for value rather than service.

Quality of healthcare

In healthcare industry, quality is an intricate concept affected by medical errors and shortfalls besides the pressure to prove cost-effectiveness. It is estimated that U.S. government is burdened with $4.4 billion because one out of every seven beneficiaries of Medicare is harmed annually in the process of providing care.

Based on the reports published by the U.S. Centre for Disease Control and Prevention, children below five years associated with diarrhea account for 9% of hospitalizations.

Appeal to improve quality

Affordable Care Act, 2010 provides an opportunity for Centre for Medicare and Medicaid to lessen the reimbursements offered to hospitals by 1% is that crosses the targeted hospital readmission rate. The same law created financial incentives to hospitals that reached the specific target of quality care scores.

Quality enhancement drive

According to the National Healthcare Quality report published by Agency of Healthcare Research and Quality in 2009, around two-thirds of 179 measures showed improvement in the quality accounting for 2.3% of a median annual rate change.

  • The 100,000 Lives campaign
  • Protecting 5million lives from harm
  • Comprehensive unit-based safety program

Archetype of successful technological implementation to bridge quality gaps in healthcare

Medtronic and Boston ScientificConstruct systems that can collect and download data from implanted devices providing a moment for the healthcare professionals to network more patients.
Phillips, Honeywell, GE, IntelConstruct systems that interact with other devices to monitor patient’s movement, behavior, and abnormal situations.  

Diversity in health care not only revised the quality of care but also promoted many entrepreneurs to start up new models of delivering care with patient compliance.

Opportunities in quality improvement

Corporate wellness is a $6 billion industry, offering incentives to improve the health of employees those of which have quit smoking or reduced weight.

  • Wellness and preventive care: Aetna, a company, provided yoga and mindfulness training to 6000 employees noticed an improvement in productivity of work by 69 minutes per week giving a return of 11:1 on their investments.
  • Lifestyle and behavior adjustments: Omada Health came up with weight loss for pre-diabetics and Zipongo with healthy eating assisted by wearable technologies to forecast and prevent acute events and customize the solutions.
  • Concierge-style medical clinics: One Medical and Lora Health are working to develop new preventive care model clinics engaging technology between patient and physician interface to facilitate patient monitoring devices in providing primary care.
  • Out-of-hospital services: Capturing the shift in services from hospitals to physician’s office and ambulatory medical centers, Walgreens and Target are opening clinics to get a hold on pharmacy and retail business.
  • Expanding markets: The implementation of Affordable Care Act is generating room for new markets in the healthcare industry.
  • Home health care services: The home healthcare market reached $ 72.2 billion in 2009 indicative of brisk growth in the franchise industry. The revenue making systems in home healthcare services are:
  • Business alliances: The 2014 report of The Top Issues reveals that 40% of Fortune 50 companies are involved in healthcare partnerships and have become the choice of 58% consumers because of improved and efficient services.

Skill gaps and quality

The demand for healthcare services exceeds the capability of healthcare professionals in delivering care efficiently. Over the past seven years, a 19% drop in family physicians and 21% drop over past nine years in internists accepting new patients is noticed.

Sometimes workers fall short of skills the employers are looking for, in contrast, the employees do not find the wages to be appealing. Both of these factors have created a huge skill gap in the healthcare industry.

Vital Healthcare Capital (V-Cap) is a non-profit organization in support for creating job opportunities in low-income communities. Innovative entrepreneurs can take advantage of this opportunity to partner with organizations such as V-Cap to create new financial models.


The expanding healthcare industry regarding services, insurance coverage, data collection, protection, and sharing, paired with consumer’s passion for preventive care is opening new market opportunities for healthcare entrepreneurs. The aspirants can explore technology-based services, insurance coverage, skill and talent industry, and business models to improve the quality of care. Healthcare is a demanding industry, the success in which is guarded by the consumer’s relevance and gratification.


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