The iPod's Greatest Legacy? Lessons for Real Healthcare Innovation.

The music player that changed everything is now discontinued, but its disruptive model can still help turn around healthcare in the U.S.

By Karthik Ganesh, CEO, EmpiRx Health

After a 21-year run, Apple has decided to call it quits on the iPod. This iconic music player did so much more than reinvent the way we listen to songs on the go. It sparked a revolution, fundamentally and forever changing the way content is consumed around the globe. While the iPod has been the poster child for innovation in consumer technology for more than two decades, its example proves even more powerful when applied to the world of healthcare.

It’s no secret that healthcare in the U.S. needs a definitive pivot. We are one of the wealthiest countries in the world with the highest spending on healthcare by far ― but 25%+ of all healthcare spend is waste, and our health as a country is declining. The time for change is now, and timeless lessons from the iPod about disruptive innovation can serve as a guide.

The Need for Innovative Category Creators

When the iPod launched in 2001, the Walkman and portable CD players were already on the market. The iPod didn’t invent the mobile music space, and it wasn’t just another flavor of what already existed. It was nothing the world had even seen before; something that created a new category entirely.

Our healthcare system doesn’t need ― and won’t realize any significant benefit from ― incremental improvements to the “solutions” that have been promising change for decades. What it does need are people and organizations who bring forth innovative ideas to solve increasingly complex healthcare challenges and enact true change.

That’s exactly what we’re doing at EmpiRx Health as we turn the industry model for pharmacy benefit managers (PBMs) upside down. Conventional PBMs primarily focus on drug volume ― pumping more drugs and higher-cost drugs into populations to drive rebates ― and it’s clearly not working. Pharmacy spending for plan sponsors has continued to rise and their populations aren’t any healthier.

In a sharp departure from the status quo, EmpiRx Health is reinventing pharmacy benefits as the only value-based PBM in the industry, and the most clinically advanced. Ours is a highly unique and client-aligned value proposition ― a pay-for-performance financial model with guaranteed savings and a client-tailored population health management solution. We take a clinical-first approach to improving health outcomes by optimizing prescribing choices directly with physicians and identifying more clinically appropriate, lower-cost drug alternatives. It’s a very different way of working that delivers very different results: better health and deep, sustainable healthcare savings.

Focusing on Patient Needs, Not What the Market Thinks They Need

Apple co-founder Steve Jobs famously said of consumers, “Our job is to figure out what they're going to want before they do … Our task is to read things that are not yet on the page.” The iPod did just that. The iPod was sleek, intuitive, and allowed people to carry a vast library of music right in their pocket. It delivered what customers actually needed, not what the market thought it needed. (Cue the Henry Ford quote, “If I would have asked people what they wanted, they would have said faster horses.”)

This distinction is glaring in healthcare with condition-specific clinical programs that focus solely on a dominant health condition. Conventional PBMs have relied on these programs for more than 25 years to improve population health. However, today 40% of Americans have comorbidities and are on multiple drugs, and nearly 23% of American adults take 5+ drugs. Inattention to comorbidities also creates underserved patients. In fact, the data continually shows that a small percentage of patients with healthcare complexity have the greatest needs and continue to be underserved across our healthcare system. Does that sound like success to you?

To meet their individual needs, patients require a healthcare services provider who has a 360-degree view of their health, treats the whole patient not just the condition, and helps them manage their medications in the context of their overall health. This patient-centered PBM approach is taking off with EmpiRx Health because we’re addressing pain points that are front and center for both people and plan sponsors ― poor health, healthcare complexities, and needless healthcare spending ― as we redefine PBMs altogether.

Meaningful innovation is sorely needed on many fronts throughout the healthcare industry. It can take hold if, like the iPod, we truly “think different.”