The embrace of technology by healthcare practices has lagged many industries, but healthcare providers are slowly discovering that the best way to meet the challenging demands associated with a larger and longer-living population is technology. Can blockchain, wearables, virtual reality, and telehealth revolutionize patients' experiences in the future?
In this segment from Industry Focus: Healthcare, host Kristine Harjes is joined by Motley Fool contributor Todd Campbell to discuss how innovative companies like Teladoc (NYSE:TDOC) are transforming how patients receive healthcare.
A full transcript follows the video.
This video was recorded on June 27, 2018.
Kristine Harjes: Let's hop in our time machine and go back to 1993 and take a trip to the doctor's office. Todd, you will remember what that was like a lot more than I will, given my age at the time. What stands out in your memory?
Todd Campbell: I was about one year out of college at the time, so I didn't have to go too often, luckily. I suppose I would have gotten into my Acura Integra -- [laughs] getting in the way back machine, right -- and I would have gone to my doctor's office. If you look back, thinking about what it was like going to the doctor back then, one of the things that jumps out at me, and it may jump out to other listeners who are my age or up, maybe just the perception that we have that when we walked into a doctor's office all those years ago, the doctor actually knew who we were, before they had to pull up a chart on the computer when they walked into the office.
That could be a misperception. Memory tends to bend things in weird ways as we get a little bit older. But, I felt that assistants weren't doing as much of the work in the actual office. You waited in the waiting room, just like you would today, for a relatively long period of time, and then you would go into the office. But I feel like it was the doctor who was doing things like blood pressure testing and asking some of these basic questions that have now been handed off to assistants.
I think you see that not just in primary care, but you also see that in other parts of healthcare, like in dental. I don't know how often you see your dentist, Kristine, I go a few times a year. Most of the time that I spend in the dentist's chair, I'm talking with my hygienist, not my dentist. I feel like there are a lot of reasons for that. I'm sure we're going to get into it. But it definitely feels to me like, over time, doctors have become more time-strapped. That could be one of the biggest trends or changes over the last 25 years.
Harjes: I'm not sure if it's because there are fewer doctors out there now, or if there's just a greater demand for healthcare, but it certainly seems like that's the case. If you just look at the demographics of our entire society, people are getting older, they're living longer, a lot of diseases that used to be a death sentence have become more manageable, to the point where they're chronic conditions. That requires a lot more healthcare. It definitely does seem to me to be the case that, when we look toward the next 25 years, we're going to need to find a way to increase the supply of healthcare, whether that's through adding more doctors, or hopefully also using clever tech and innovation to better be able to meet that rising demand.
Campbell: To your point, Kristine, I went back and I looked at it, because I wanted to get some data to put this in context for our listeners. One of the things that I found is, back in 1993 -- when the Gardners were just getting started on their Foolish journey -- the total number of doctor visits that were performed was about 717 million. Between 1993 and 2010, that climbed by almost 40%.
Now, you would assume that some of that is going to be because your population is getting bigger, right? But the population only increased by about 19% in the period. You have a situation where not only are people living longer, etc., but you also have this scenario playing out where more people were seeing the doctor more frequently, I think climbing from 2.7 to 3.2 visits per year.
And you're right. This is really taxing the supply of doctors. I think we've spent a lot of resources and time and policy trying to figure out how to handle the increased demand, make healthcare accessible to everyone. Maybe we need to start spending a lot more time on trying to figure out how to make sure there are enough doctors, nurse practitioners, and physicians' assistants out there to serve everyone who needs the care.
Harjes: It does seem like there's a pretty obvious need here for some sort of solution. What stands out to me when I think about what going to the doctor was like 25 years ago was how little has changed about the entire experience. I get the impression that part of the reason that so many young people are reluctant to go to the doctor is because of how antiquated the entire system is. We're used to technology meeting us at the level that we want to be at in so many areas of our lives -- I can book my fitness classes online, but I can't book my annual checkup online with my doctor. Facebook seems like it knows everything about me, but then, when I go into a doctor's office, I still have to fill out my date of birth, and all these other very basic facts of my personal information, on physical pieces of paper!
Look at consumer goods, too, for example. When I want to buy my paper towels or anything, I can very easily price shop. I can go online, and I can compare prices from place to place, and get a very easy quote. You can't do that for medical services and for medicines themselves. It really does seem like, in all of the other sectors, these pain points have been greatly diminished, if not completely eliminated, except for in healthcare.
When I look at the changes that could be on the way for the next 25 years in healthcare, I think the best thing we can do is look to other sectors for a hint of, how exactly will the new trends take place, and how will other sectors handle the transition to an advancement, before it makes its way over to the seemingly much slower healthcare sector?
Campbell: Healthcare does move more slowly. There's no getting around that. I think one of the main drivers, possibly, of some of the changes and the disruption that we've seen over the last decade or so has been forced by regulatory change. I remember the HITECH Act and some of these things we've talked on the show about before, trying to encourage, with carrots and sticks, practices to go out and actually institute some of this technology.
Again, there's that old saying -- we can do it fast, we can do it well, we can do it cheap; pick two. When it comes to healthcare, you're talking about a doctor-patient relationship where that's where the focus should be. A lot of what technology does is aimed at streamlining, or potentially coming at odds, with increasing the amount of time that you spend with your patients on coming up with real solutions. I think there's a dynamic there at play that forces a slower adoption rate of some of these things, because people want to push back and say, "No, I want to be able to have that close interaction with my patient."
I think, ultimately, though, -- and, Kristine, it sounds like you're going to agree with me -- you're going to have to approach these kinds of innovations if you want to be able to handle the demand that we're going to see from patients. People are living longer, things are happening now that are turning diseases that were once death sentences into chronic diseases -- all of that is going to increase demand. Trying to figure out the way to handle all that demand is going to involve all sorts of different things.
One of the things that we've seen over the course of the last few years, Kristine, is the consolidation across the industry. You see a lot of private practices that are banding together and becoming a part of hospital networks, because the hospital networks will say, "We'll take over the administrative burden of that, and that way, that frees you to still visit with your patients." But at the same time, these are now viewed as profit centers, because of all the complexity that's associated with the industry and the way payments are generated. The hospital systems are saying, now, "Well, you need to schedule a patient every 11 minutes instead of every 15 minutes." That's creating so many different stressors throughout the system and the way healthcare is provided to Americans.
Harjes: You're right that there is this tension between, how can we automate things and make them more efficient and, how can we keep things high-touch and a good experience for the person? I want to go back to the reluctance that you were talking about, where people don't want to spend more time with a computer as opposed to their doctor.
I don't think that's something that's unique to the healthcare system. You saw some reluctance, say, with the rise of e-commerce, where people were like, "No, I don't want to buy my clothes from Amazon. I want to go in the store and touch them and try them on." But, slowly but surely, people were won over by the convenience of this easier, simpler, online interaction.
I think that we're seeing that unfold in healthcare, specifically with telehealth. We've talked a little bit about a company called Teladoc on this show. I think that this is something that will be a trend that really takes prominence, not even in 25 years, but maybe over the next five or so years. More and more employers are offering insurance plans that give you access to telehealth. I think people are starting to recognize that there are so many reasons why you would prefer a telehealth visit over actually having to go into a medical office.
Campbell: Especially if you're sick. If you're sick, you're saying, the last thing I want to do is go sit in an office and cough over everyone, and wait 15-20 minutes, and then get there and have a bunch of questions asked, and then my doctor comes in 15-20 minutes later. It's an hour, an hour and a half, before you actually get a prescription to take to the pharmacy.
I think there are a lot of advantages that come with telehealth. It's on-demand. You mentioned a lot of employers. I think it's like 90% of large employers now offer some form of telehealth service. Listeners, if you work for a big company, you probably have access to this and you just may not know about it. I think the most recent statistics show that only 3% of employees actually take advantage of telehealth.
My expectation, though, Kristine, would be that, as millennials represent an increasingly larger percentage of the workforce, their willingness to accept and adopt technology throughout their entire life, they're going to be the big drivers, as opposed to the adoption of telemedicine or telehealth. That would be, potentially, huge for a company like Teladoc. They say that their addressable patient market is something like $57 billion. I think last year, their sales were only $233 million. So, there's a tremendous opportunity for time-saving solutions like that.
I also, Kristine, think another one of these solutions could be increasing use of virtual reality-type devices, which can obviously help on the supply end, by training more doctors and more healthcare providers, but can also help patients by providing them with greater insight into different healthcare issues, and other technologies and medical devices. We've talked in the past about diabetes and some of the things that are occurring in diabetes, with the artificial pancreas, and different things that are allowing us to better monitor and track our disease, such as healthcare wearables. All of those things are providing so much information that I think will be used in exciting ways to maybe automate a lot of the healthcare that we're provided. And I don't mean that in a bad way. I mean, say, taking over a huge population of data and being able to find best practices that can just be rolled out very automatically and more efficiently to have better outcomes across the entire population.
Harjes: The broader trend that you're speaking to here is using tech to assist human decision-making and execution. It's something that, again, we see in other sectors. For example, think about self-driving cars. Machines are already helping humans drive pretty prominently with semi-autonomous vehicles, with features like lane assist.
There's the healthcare equivalent. The one that comes to mind for me is in robotic surgery. Intuitive Surgical has their da Vinci surgical Systems, which help surgeons perform their surgeries better. Of course, this leads to better outcomes for the patients and shorter stays in hospitals. Again, this is taking that burden of demand off of the healthcare system little by little by harnessing technology.
Another one that I want to emphasize is artificial intelligence. Todd, you talked a little bit about making better use of data. I think that's huge. I really want to emphasize that there are so many applications of AI in healthcare. The one I'm most excited about is in diagnostics, and using better data, better information, and harnessing everything that computers can do now, to make better diagnoses. If you think about how many false positives occur across a bunch of different indications, I feel like there's a huge opportunity there to bring those numbers down and be more precise. Fields in radiology and dermatology, I could see ophthalmology, all of these, are really ripe for layering in machine learning, deep learning, and AI power, to be able to drive efficiencies.
Campbell: It's almost like a trend toward predictive healthcare, taking it one step earlier. It's not just preventative, it's predictive, where you're able to take a look at some of these insights into DNA or whatever and be able to come to some decisions early on about what kind of health crises we may face over our lifetimes, and then be able to intervene before we even suffer any of the symptoms. All of those things could play in. You mentioned robotic surgery. That's a great example. Obviously, these robots aren't doing the surgery themselves, yet, but they are assisting. When they're assisting, they are reducing complications, which means fewer readmissions and better outcomes for patients and payers.
I think there are a lot of different opportunities to do that by blending together wearables, data collection or recording, the reporting of that data, the analysis of that data, and then, of course, coming to the conclusions from that data on what the most appropriate treatment should be. I think, in the next 25 years, we're going to see the pace of innovation in healthcare be much faster than it was the last 25 years.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Kristine Harjes has no position in any of the stocks mentioned. Todd Campbell owns shares of AMZN and FB. His clients may have positions in the companies mentioned. The Motley Fool owns shares of and recommends AMZN, FB, and ISRG. The Motley Fool recommends Teladoc. The Motley Fool has a disclosure policy.