Dr. Kaveh Safavi of Accenture

Healthcare Strategy for the 2020s: A Discussion with Accenture’s Dr. Kaveh Safavi

December 14, 2020 – By Jared Mueller, Director – Mayo Clinic Innovation Exchange

As part of Accenture’s relationship with the Mayo Clinic Innovation Exchange, Accenture experts meet with Innovation Exchange members both one-on-one, and via presentations on topics of interest to healthcare startups. This autumn, Dr. Kaveh Safavi — a senior managing director responsible for Accenture’s offerings for providers, health insurers, and public and private health systems globally — spoke with the Exchange’s members about healthcare trends that will drive the sector’s evolution through 2030.

Before joining Accenture, Dr. Safavi led Cisco’s global healthcare practice. He earlier served as chief medical officer of Thomson Reuters’ health business and vice president of medical affairs at United Healthcare, and held leadership roles at HealthSpring and Humana. Dr. Safavi earned an M.D. from Loyola University School of Medicine and a J.D. from DePaul University College of Law. He is board-certified in internal medicine and pediatrics and completed his medical residency at the University of Michigan Medical Center.

Q: What should entrepreneurs know about going to market in the healthcare sector?

KS: When sellers have products, they generally think about value as “the absolute benefit a customer can get from doing business with me, divided by the price the customer pays me.” But customers don’t think of value that way at all. Their question is: “what’s the benefit I get from doing business with you, compared to every other option that is available to me? And what is the total cost of doing business, not just the price paid, but the total cost including disruption, time, and all other factors?”

Healthcare has a very complex value chain, where patients end up directly paying only a small part of the bill. This ranges from less than 5% of typical hospital bills, to 20% to 25% of pharmaceutical bills — with the balance being covered by third parties. So the person receiving value from a healthcare perspective is one kind of a customer, but the entity covering the majority of the cost is a different kind of customer. And they see value differently.

In healthcare, there is an especially large break between the value of a product and the payment for that product. It’s important to recognize that some entrepreneurs choose a go-to-market strategy focused on a particular corridor of patient value generated, while others focus on corridors of payer value created — and others get stuck in between, generating some value for both. As a healthcare entrepreneur, it’s important to be clear-eyed and honest about the relative apportionment of value and cost between patients and payers.

Q: How do demographics impact the opportunity for innovation in healthcare?

KS: We have traditionally thought of providers and patients as the key axis of healthcare provision, but that is in flux today. Here’s the fundamental question: Is healthcare about the provision of services by providers? Or is it about people’s desire to get better when they are sick, regardless of whether they see a doctor? The reality is that over time seeing the doctor has been the only path for getting better. But thanks to the intersection of demographics and innovation, people will increasingly seek out other options, such as self service. Providers have to recognize this profound shift in healthcare provisioning.

There’s no doubt that demographics and socioeconomic issues impact healthcare across every country. What many people think is the single biggest problem is that the demand for care is growing faster than the supply of care, if you use human labor as the key way to supply care. That problem doesn’t get solved unless you train a far greater number of providers, or start determining how to provide care with fewer humans involved. That’s a massive opportunity for innovation that comes straight out of demographics. If artificial intelligence (AI) and machine learning allow technology and emerging tools to take on a greater share of simple – but non-routine – tasks, that will solve one of the greatest information technology and cost containment needs in healthcare.

Younger consumers also have higher expectations for service quality in healthcare, given rapidly improving service experiences across many industries (mobile telephony, at-home entertainment, etc.) So those consumers are increasingly demanding a narrowing of the gap in the service experience between industries.

Q: What are key distinctions between how healthcare startups should think about pitching their solutions in the United States, versus in other markets?

KS: In countries around the world, the main healthcare problems a country wants to solve are: access, affordability, and effectiveness. Each country weighs those priorities differently. In the United States, affordability is the driving issue. If a company isn’t able to clearly address how it supports affordability in care, it will have an uphill climb.

That is less true in the United Kingdom and other European and Organisation for Economic Co-operation and Development (OECD) markets. If you lead with affordability in those markets, you are likely to be rejected or deprioritized. Even though affordability is a salient consideration in those countries, from a value perspective, there is a preference for focusing on effectiveness and access when evaluating new solutions.

Q: Are there frameworks that you would advise healthcare entrepreneurs keep in mind?

KS: We use the DVF framework when we’re advising innovative healthcare companies, with a focus on Desirability, Viability, and Feasibility. Is there a market today, and in the future? Do the key customers really desire this solution? From a viability standpoint, is it economically sustainable across both the near term and the long term? Feasibility includes the questions: can I do this from a regulatory perspective, a labor perspective, and a technological perspective?

Q: What breakthrough innovations in healthcare delivery or technology excite you most?

KS: AI is going to have a substantial impact on healthcare because it is the first technology that can learn for itself and therefore perform simple but non-routine tasks. I think the greatest benefits will be in its ability to free up clinician time so more of it can be used for clinical judgment.

Work by our team and others estimate that around 30% of what a clinician does can be done by a smart technology or a non-clinician with smart technology. Two great examples are reading clinical documents to extract clinical terms or typing data in to capture structured data during a conversation. AI has augmented natural language processing and speech and language recognition to the point where it is foreseeable that we can give the doctors back the 10% to 15% of their day the lost to typing. The news media narrative on AI has focused on machines making diagnosis. That is certainly interesting, but I think the transformative impact of AI will be on non-clinical tasks that significantly improve labor productivity.

Views expressed by guests are their own and do not necessarily reflect the views of Mayo Clinic. As a not-for-profit 501(c)(3) charitable organization, Mayo Clinic does not participate in political activities.