What Healthcare Could Learn From Amazon, Uber and the Movies

By Ted Tanner,


America spends more on healthcare1 than any other nation in the world— nearly $3.8 trillion or close to 20%2 of the United States’ GDP. That number breaks down to more than $10,000 per person on average per year, more than twice what other developed nations spend per capita.

At the root of high spending are disparate technology systems that don’t talk or work with one another. Picture walled gardens. Health insurance systems aren’t seamlessly integrated with software programs at hospital systems; some hospital departments within the same building can’t communicate digitally. Worst of all, patients are in the dark about much of it. The solution is simpler than one might  think, and it's being done in retail, transportation and the movie business right this very second.

Enter the Web Application Programming Interface (API)

In tech speak, APIs are sets of protocols and tools for building software applications. They might be conceptualized as connectivity tunnels that easily fit into existing infrastructure to establish previously nonexistent lines of communication. They allow independent, stand-alone systems that were not built with any intention of connectivity to work together efficiently. It is like what The Moving Picture Experts Group (MPEG) did in the entertainment industry: enabled people to watch movies in a theatre or on a tablet. Why not usher in a true level of interoperability for the sake of society’s health?

Consumers, who use a computer, have a smartphone or drive a car, experience APIs every day but might not even know it.
APIs got their start nearly 15 years ago pioneered by companies like Salesforce.com, eBay and Amazon. For example, Amazon made it possible3 for developers to incorporate functionalities of Amazon’s search and shopping experience onto their own websites. This ushered in a new era of ecommerce as consumers began to shop online. Now at least 15% of all retail spending is done online, and mobile commerce is growing 53% percent year over year.4 APIs mean big business.

A decade ago, Google introduced a new twist to APIs when it allowed its maps to easily be embedded into external websites. Developers made their own mark, and location-based services entered the fold. Need to search for a nearby restaurant right now? Lost and need directions? APIs help users find a way to get from here to there, in the palm of their hands.

Hailing a town car through Uber relies on a more modern application of an API. As venture capitalist Maxwell Wessel explains,5 “When you locate yourself and request a car, Google Maps helps Uber route drivers to your location (for now). When you receive a text message with a driver en-route, it’s powered by Twilio’s APIs. When your receipt appears in your inbox, it’s SendGrid’s transactional email system.” Uber didn’t do all the software development; it merely reorganized the way consumers engage with transportation—digitally. The same can be done in healthcare, and it’s the first inning.

“According to the Harvard Consulting Group, an API model has the potential to save the healthcare industry more than $320 billion in eligibility, claims, referrals and scheduling alone. The group found going digital using APIs is 89% less expensive than the antiquated phone call, paperwork and manual intervention processes accepted as status quo.

Imagine if the healthcare system committed to leveraging APIs to reorganize itself. How would that impact both the consumer experience and the bottom line? According to the Harvard Consulting Group, an API model has the potential to save the healthcare industry more than $320 billion in eligibility, claims, referrals and scheduling alone.6 The group found going digital using APIs is 89% less expensive than the antiquated phone call, paperwork and manual intervention processes accepted as status quo.

The truth is, many healthcare executives are encountering and learning the advantages of APIs for the first time. This industry doesn’t have the luxury of time to replace or rebuild legacy infrastructure. Newly empowered consumers are demanding the speed, access to information and consumer experience they get in every other industry, and it can’t be delivered by obsolete systems.


A Look Back at Technical Standards

In 1996, everyone made such a ruckus about the Health Insurance Portability & Accountability Act (HIPAA). It was intended to make the healthcare system in the United States “better,” including making it more efficient by standardizing healthcare transactions such as eligibility verification and claims processing. This standard for electronic transmission of information is called HIPAA ASC X12 5010 and was required of all healthcare plans. Unfortunately, conventional approaches that support HIPAA ASC X12 5010 standards injected huge hidden costs within the infrastructure and still don’t tackle critical issues, such as making the different systems involved in a healthcare transaction interoperable.
X12 can be ugly. Despite all these available standards, they are customizable, making compatibility issues worse.
Beyond HIPAA, there are HL7 standards, established by the non-profit organization founded in 1987 called Health Level Seven International. Its vision is to enable everyone to “securely access and use the right health data when and where they need it.” Because HL7 can be customized to such a degree, different health IT systems can’t recognize certain data and renders it inaccessible. This means someone who has just moved and is suffering from a chronic disease, such as diabetes, can’t port his or her records over to a new health system electronically. It means another series of expensive, unnecessary tests and paperwork that must be manually uploaded yet again. Fast Healthcare Interoperability Resources7 FHIR(R),7 created by HL7, is trying to tackle this but has a way to go.

APIs can be used to fetch, read and return health information that's been written and stored in a languages such as X12. To some, X12 is atrocious and written for mainframe computers built in the 1970s. The best APIs bring information back to consumers in a prettier, industry standard format called JSON, making it possible to put it to use for Web experiences expected by consumers today. While not perfect, the standardization of data and records has allowed APIs to come into play and work their magic.


Online All the Time and the Era of “Medley Medicine”

Now by law, all U.S. residents—more than 300 million people—are required to maintain health insurance. As a more affordable option, 22 million Americans were projected to enroll in high-deductible health plans (HDHPs) by 2025.8
Currently there are already more than 37 million people enrolled in such plans, a goal reached 10 years earlier than projected. Those with HDHPs covering their families could spend $12,900 out of pocket each year before insurance kicks in. This is driving a new wave of retail shopping behavior as consumers look for more convenient and cost-effective options, from retail clinics and to concierge care.

“…22 million Americans were projected to enroll in high-deductible health plans (HDHPs) by 2025.”

Those most fiscally aware and responsible for medical costs are choosing to make big box retailers, such as Target, Rite Aid, CVS, Walgreens and Walmart, their first touch point rather than making their primary care doctor their first call. And they will serve as a junction between online and offline engagement in healthcare. Software will power information collection, access, storage and transaction processing. APIs incorporated into this process are integral to allowing the secure, seamless flow of clinical, insurance, financial and patient identity data within and outside the four walls of a health facility.

It is as simple as making sure claims are submitted to insurance carriers in an efficient, automated fashion or ensuring the care a patient receives in a retail setting is coordinated with care from a patient’s primary physician or at a hospital or clinic during an earlier visit. It is about managing multiple healthcare records across multiple systems and locations. By using APIs to manage information flow, highly skilled (and expensive) employees, who have specialized training in claims processing, don’t have to do the grunt work.
The rapid adoption and popularity of telemedicine for non-emergent conditions, ranging from colds, flus to upper respiratory infections, make telemedicine companies a popular choice for employers, health plans and consumers.

The methodologies that will allow these applications to scale are through platform approaches with APIs. These APIs allow developers to take advantage of a plethora of technologies without having to build the underlying core suite of technologies and infrastructures themselves. The global telemedicine technology market is expected to reach $43 billion in 2019,9 paved in part by 22 states and the District of Columbia requiring private insurers to cover telehealth the same way they cover in-person healthcare services.
In the olden days of HMOs, primary care doctors were the gatekeepers, who had a 360-degree view of a patient and handled referrals to their preferred list of specialists. Now consumers who think they might have bronchitis could go online and consult a telemedicine doctor they have never met in the comfort of their homes. Or they might walk down to the corner drugstore, which now houses a clinic.

For every medical consultation, beyond capturing health history and personal information, there are threads of financial transactions, such as copayments, deductibles and out-of-pocket expenses. This information must be stored and processed digitally across heterogeneous systems and organizations—something that APIs make possible.
APIs are so critical to horizontal interoperability for patient interactions that will increasingly happen in different venues. Legacy systems can be easily retrofitted without "ripping and replacing" and provide a parallel development glide path.

  • Bernstein L. “Once Again, U.S. Has Most Expensive, Least Effective Health Care System in Survey.” The Washington Post. June 16, 2014.
  • “Research, Statistics, Data and Systems.” National Health Expenditure Data. CMS.gov, Dec. 9, 2014.
  • “Amazon.com Launches Web Services; Developers Can Now Incorporate Amazon.com Content and Features Into Their Own Web Sites; Extends '’Welcome Mat'’ for Developers.” Amazon PR. July 16, 2002.
  • Lipsman A, Fulgoni G. “State of the U.S. Online Retail Economy in Q1 2015.” Comscore May 27, 2015.
  • Wessel M, Ng R. “Software for the Full-Stack Era.” TechCrunch: Crunch Network. July 25, 2015.
  • “The Future of Healthcare.” Harvard College Consulting Group and PokitDok. 2015.
  • “Introducing HL7 FHIR.” org: FHIR, July 25, 2015.
  • Goldhill D, Howard P. “An ObamaCare Inspired Rebellion.” The Wall Street Journal. July 1, 2015
  • Bowman D. “Global Medicine Technology Market to Hit $43 Billion by 2019.” FierceHealthIT. Oct. 17, 2014.

About Ted Tanner

Ted Tanner, Jr. is the Co-Founder and CTO of PokitDok. Ted has had architect positions at both Apple and Microsoft and has held instrumental roles in several startups, including digidesign (IPO and acquired by Avid), Crystal River Engineering (acquired by Creative Labs), VP of R&D at MongoMusic (acquired by Microsoft) and Co-founder and CTO of BeliefNetworks (acquired by Benefitfocus). He was also the CTO of Spatializer Audio Labs (NASDAQ: SPAZ), a company specializing in digital signal processing solutions.

Ted is on the Clemson University Restoration Institute's Executive Advisory Board, the Industry Advisory Board (IAB) for the University of South Carolina Computer Science Department, the IAB for the Center for Intelligent Systems and Machine Learning at the University of Tennessee, and Advisor to the College of Charleston's Department of Mathematics. He has published numerous articles in leading technical magazines and holds several patents in the areas of blockchain, semantics, machine learning, signal processing and signal protection.

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The opinions expressed in this blog are of the authors and not of PokitDok's. The posts on this blog are for information only, and are not intended to substitute for a doctor-patient or other healthcare professional-patient relationship nor do they constitute medical or healthcare advice.

  Tags: Health Innovation


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