Despite promises of revolutionizing healthcare, Big Tech companies are falling short, in part because of their underestimation of the U.S healthcare system, Sachin Jain, MD, president and CEO of SCAN Health Plan, wrote in Forbes Feb. 15.
Here are the four ways Dr. Jain thinks Big Tech underestimated healthcare, causing them to disappoint:
- Given the amount of players in the healthcare system, including payers, providers and pharmaceutical companies, it is hard to achieve scale. Any new offerings interfere with legacy systems, meaning large-scale instant disruption is usually out of reach.
- Although the shift to value-based care is happening, it's moving far more slowly than anticipated, meaning innovative models still have to operate in a fee-for-service model, making it difficult to create value.
- Managing risk is a foreign concept to most tech companies, especially when risk determines cost, as it does in healthcare.
- Healthcare is a low profit-margin business that pales in comparison to the tech sector's large margins.