My keynote at the Genentech Medical Affairs Summit in San Diego on March 19, 2019. Technological change happens like Hemingway's famous description of bankruptcy, first gradually, then suddenly. I illustrate this through the history of the online ride hailing market, then apply lessons from Uber/Lyft, Google, and Amazon to speculate on what changes will be required to make health data and personalized medicine have its "Suddenly" moment. Be sure to download and read the narrative in the speaker notes.
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Gradually, Then Suddenly: Lessons from Silicon Valley for the Future of Healthcare
1. Gradually, Then Suddenly
Lessons from Silicon Valley
for the Future of Healthcare
Tim O’Reilly
Founder and CEO, O’Reilly Media
Genentech Medical Affairs Summit, March 19, 2019
2. “How did you go bankrupt?”
“Two ways. Gradually, then
suddenly”
Ernest Hemingway
3.
4. Sunil Paul had the idea in 1999!
In July 2000, just as GPS was first
opened for commercial use, Sunil
Paul filed a patent that described
almost everything that by 2011 would
become his company Sidecar, and
then Lyft and Uber.
What took so long? And why was
Sunil’s company the loser in the race
to the future?
5. Sometimes the world just has to catch up
• 2005 – Google launches Google Maps
• 2006 – Amazon launches AWS
• 2007 – Apple introduces the iPhone
• 2007 – Hackers jailbreak the iPhone to
add custom apps
• 2008 – Google launches Android
• 2008 – Apple launches the App Store
and Google launches Android Market
• 2007- 2010 – Braintree, Stripe, Twilio etc.
build out enabling services for mobile apps
(payment, communications, etc.)
6. “Framing blindness”
We often begin by
imagining the future in
familiar terms, and our
use of new technology is
shaped by what we
already know, and
drawing within the
existing lines.
7. In 2005, we thought the connected taxicab looked
like this
We knew what the
internet was for:
It’s for showing
content and ads!
And we can read
your credit card too!
8. New puzzle pieces on the table
2007 – Taxi Magic uses the web to hail taxis
2007 – Zimride matches college students for long drives
2009 – Uber uses SMS to summon black cars
2012 – Sunil finally launches Sidecar – GPS enabled, with drivers
who use their own cars; he is slowed by attempt to work with
regulators, and lack of capital
2012 – Logan Green and John Zimmer ditch Zimride and launch Lyft
2012 – Uber launches UberX to copy the crowdsourced driver model
and pours on the gas
2017 – Bikes and scooters get added to the mix
9. “A business model is the way that
all of the parts of a business work
together to create competitive
advantage and customer value.”
- Dan and Meredith Beam
10. A Business Model Map of Uber
• A magical app that lets
drivers and passengers find
each other in real time
• Seamless integration of
data services like location,
communication, and payment
• A networked marketplace
of drivers and passengers
managed by algorithm
• Augmented workers able to
join the market as and when
they wish
12. We’re still in the “gradually” stage for healthcare
• Ubiquitous smartphones
• Health outcomes data availability coming together with a shift in
business models, enabling payment for outcomes rather than fee for
service
• Big data, cloud computing, AI, genomics, proteomics, etc. enabling
personalized medicine, drug discovery, and more
• Video calling, remote sensing, enabling telemedicine
• Remote sensing, robotics, and the Internet of Things
• Patients who expect services as easy to use as their smartphone apps
14. “The value proposition hasn’t yet
overcome the misaligned incentives. But
the value proposition continues to
increase.”
Jamie Heywood, PatientsLikeMe
19. • Trillions of web pages indexed, in real time
• 5.5 billion searches per day
• 63,000 searches per second
• 50-60 billion ad impressions per day
• Response time of about half a second (reported on every query)
20. A System of Collective Intelligence
• Every web user contributes to Google’s collective intelligence
• whenever we create a web page
• whenever we link to a web page
• whenever we click on a search result
• whenever we follow maps and directions on our phone…
• Humans build and manage the systems for extracting relevance, for
combating spam, and for keeping things running at greater and
greater scale and speed, but the system is too big and too fast for
traditional “management” or decision making. Google is a giant AI.
• The stakes are very high: Human minds are reflexively shaped by
the knowledge and opinions aggregated there and on other similar
platforms.
25. Gradually, then suddenly
The great internet services are all real-time
matching marketplaces managed by
algorithm. This is a radically new form of
business organization.
27. And then of course, there are the warehouse robots
28.
29. Algorithms decide “who gets what – and why”
Markets are outcomes. A better
designed marketplace can have
better outcomes.
30. Google is made up of two overlapping algorithmic
marketplaces
• Google Search: Uses 200+ ranking factors to match up users with
the information they are searching for. Constantly updates its
systems with new data and new, improved algorithms. What
remains constant is the desired outcome: users find what they
want. This is a marketplace where money plays no role in what is
shown.
• Google Ads: Uses an auction model in which the top ad placement
doesn’t go to the highest bidder but to the best combination of price
and projected likelihood that the user will click on the ad (i.e. that it
too is what they want.)
31. How might this work in healthcare?
• Hundreds of factors – population health data, personalized health
data, outcome data on interventions – are weighed to give the
physician a set of recommendations focused on the best health
results.
• An economic AI engine makes recommendations on the best
combination of health outcomes and costs. Providers compete for
the patient’s business by being the best option.
32. “The opportunity for AI is to help humans
model and manage complex interacting
systems.”
Paul R. Cohen
University of Pittsburgh
33.
34. “Comprehend Medical is helping to identify patients
for clinical trials who may benefit from specific
cancer therapies. Fred Hutch[inson Cancer Center]
was able to evaluate millions of clinical notes to
extract and index medical conditions, medications,
and choice of cancer therapeutic options, reducing
the time to process each document from hours to
seconds.”
- Dr. Taha A. Kass-Hout and Dr. Matt Wood, Amazon
Taha A. Kass-Hout
35. Better scheduling and logistics may be the first
value-add
“Patients who need appendectomies are
typically scheduled for an hour in surgery. But
young, otherwise healthy people often need
less time.
‘If I look at a million patients like you, and
discover we only need 25 minutes, wouldn’t
that be better for society? Because now the
OR is the most expensive place in a hospital,’
Halamka said.”
Bloomberg, March 4, 2019
John Halamka, MD
Beth-Israel Deaconess Hospital
36. Gradually, then suddenly
The system will evolve from
making recommendations to doctors
to a dynamic real time system
designed and managed by doctors.
37. Working at the scale and
speed required by
personalized medicine
without the help of AI will be
like asking workers to build
a modern city with only
picks and shovels.
39. The front-line “workers” at Google & Amazon are
programs. Software developers are actually their
managers.
Every day, they are inspecting the
performance of their workers and
giving them instruction (in the form of
code) about how to do a better job
40. A new kind of management
“It’s the difference between
‘playing Caesar’ (deciding which
projects live and die), and ‘playing
the scientist’ (being perpetually
open to search and discovery.)”
- Eric Ries, The Startup Way
41. New skillsets are needed
• User Centered Design
• Site Reliability Engineering
• Data Science
• Machine Learning
• API Design
• Economics
• Market design
• Data security
48. “The No. 1 thing that has made us
successful by far is obsessive
compulsive focus on the customer.”
Jeff Bezos
49. User-centered design is a superpower
A “magical” app takes advantage of new technology to do something
delightful for customers that previously seemed impossible.
It doesn’t have to be
complicated. Here’s
One Medical,
reinventing
the house call –
on a mobile phone
50. Applying for food benefits
in California used to be nearly
impossible online and 45% of those
eligible never got the benefit.
Now, GetCalFresh makes it easy
and with over 670,000 people
helped, we’re closing the
participation gap.
51. A Future Business Model Map of Roche?
• A magical app that lets
patients request care as they
need it. Everyone gets the
right treatment.
• Seamless integration of
personalized patient data
into a health intelligence
platform
• Augmented workers able to
deliver the 21st century
housecall
• A matching marketplace
managed by algorithm
52. Drug
Discovery
Learning
in real time
Drug
Discovery
Personalized
medicine
Prices so low
everyone gets a
“Cadillac plan”
No waiting
for care Payment is
invisible
Access at the
touch of
a button
Population
Health
Data
Automatic
Ticketing
machines
Personal
Health Data
A health
intelligence
platform
So smart that
paying for outcomes
is more profitable
Magical
User Experience
“Everyone gets the
right treatment”
Augmented
Health
Workers
Care that
shows up
when you
need it
Managed
By
Algorithm
The best specialists are
available to everyone
Physicians and other
frontline health workers
have AI on demand
Doing now what patients need next
53. This is the future I envision for you
• A dynamic learning system with data-driven
economic incentives
• An internet-scale, algorithmically managed
marketplace
• Focused on better health outcomes
• Augmented health workers serving empowered,
augmented consumers
54. The puzzle pieces are all on the table
• Putting patients at the center
• The shift to wellness rather than illness
• Collaboration between health systems and health plans
• Increased adoption of virtual care options
• Greater focus on population health
• The collection of patient health data rather than just health care billing
data
• Aligning the financial incentives with the care incentives––or
disconnecting them entirely!
55. What do the great technology platforms teach us about
the future of business and the economy?
The future isn’t inevitable. It doesn’t
just happen.
It is up to us to build the future we
want.
wtfeconomy.com