Over the past decade, “health care” and “innovation” are rarely heard apart from one another in conversation. The two terms are so closely intertwined because stakeholders–including tech giants and entrepreneurs, providers and payers, and the government–all see the value in using innovative thinkers, collaborative teams, and advanced technology to solve problems, improve patient access, and provide better patient care.
But why is this still so relevant today?
Despite having some of the most advanced technology and world-class doctors, the American health care system is also faced with many problems. The statistics below help to explain why so many startups are formed to bring innovation to health care and why many health systems themselves are investing in their own disruption.
Keep reading for five reasons that convey why innovation in health care is a necessity. If you’re an entrepreneur, maybe this list will inspire you to jump into the health care space to transform one of these challenges into an opportunity.
Health care in the U.S. is expensive.
Spending on health care in the U.S. was $4.5 trillion in 2022. That breaks down to $13,493 for every man, woman, and child in the country, according to the Centers for Medicare and Medicaid Services. And as a share of the nation’s Gross Domestic Product, health spending accounted for 17.3%.
Americans face medical risk compared to other developed nations.
The U.S. had the highest infant mortality rate and lowest life expectancy among 11 wealthy nations, according to a 2021 report by the Commonwealth Fund. Further, our rate of preventable mortality is more than double that of the best-performing country, Switzerland (which spends about $7,700 per person on health care).
Our health care systems produce too much waste.
A 2019 study published in JAMA estimated the total annual cost of waste in the U.S. health care system in several categories. Among those categories were fraud and abuse, which added $58.5 billion to $83.9 billion in yearly costs, and administrative complexity, which added $265.6 billion. Failure to coordinate care cost an estimated $27.2 billion to $78.2 billion a year. And overtreatment or providing low-value care contributed $75.7 billion to $101.2 billion.
Medical errors are a significant problem.
It is estimated that about one in 20 patients are exposed to preventable harm in medical care, according to a 2019 analysis published in the British Medical Journal. The authors of the study point out that “there are limited quality improvement practices specifically targeting incidents of preventable patient harm rather than overall patient harm.”
Millions of Americans are uninsured.
While health insurance reforms and new government options a decade ago helped millions of Americans gain coverage, there are still millions without it. According to the U.S. Census Bureau, approximately 26 million people in the U.S. did not have health insurance in 2022, or 7.9 % of the population. The lack of insurance can prevent people from seeking care and lead to more costly and less effective interventions later in life.
UPMC Enterprises and our portfolio companies are constantly working to resolve many of the toughest issues facing health care today using top technology and innovation. Learn more by exploring our current portfolio.
Do you want to help UPMC Enterprises make life-changing medicine possible? Let us know about your innovative business idea here.
