The words health care and innovation are bumping up against each other a lot these days. Seems many stakeholders, including tech giants and entrepreneurs, providers and payers, and the government, are looking to bring innovation to health care.
But why all the focus on health care innovation?
Despite having some of the most advanced technology, world-class doctors, and more, the American health care system also has many problems. The statistics below help to explain why so many startups are being formed to bring innovation to health care and why lots of health systems themselves are investing in their own disruption.
Keep reading for five reasons that show why innovation in health care is needed. And if you’re an entrepreneur, maybe this list will inspire you to jump into the health care space and turn one of these challenges into an opportunity.
Health care in the U.S. is expensive
Spending on health care in the U.S. was $4.1 trillion in 2020. That breaks down to $12,530 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 19.7 percent, which is higher than any other nation on earth.
The health of Americans is poor
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).
There’s 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 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, 28 million people in the U.S. did not have health insurance in 2020, or 8.6% of the population. The lack of insurance can prevent people from seeking care and lead to more costly and less effective interventions later on.