Business & Economics

What Uber Can Teach Healthcare

Healthcare in the 21st century can learn a lot from Uber—and it’s already doing so

Image Credit: Tolga Akmen/Getty Images

Uber is so iconic that “uberization” has become a common word in business parlance. Uber (with Lyft and others) shook the taxi industry to the core. Pre-2009, Uber would have been impossible. The technology didn’t exist, and taxi regulations wouldn’t have allowed it. But in the 2010s, new technologies, consumer angst and Uber’s success at pushing regulations to the edge made ride-sharing possible and perhaps irresistible.

Healthcare in 2021 is at a similar inflection point. New technologies (e.g., telehealth, remote monitoring, consumer diagnostic devices, 3D printing) are changing care. Dissatisfaction with the state of healthcare is palpable among patients and providers. The regulatory fortress protecting healthcare professionals and institutions is crumbling. And over the past year, the COVID-19 pandemic turbocharged all these trends in ways that would have been unimaginable before the novel coronavirus blanketed the earth.

The case for uberizing healthcare is compelling. Traditional healthcare will resist, as traditional taxis resisted Uber. The outcome is likely to be—and ought to be—similar. But what was so revolutionary about Uber? Why didn’t Uber happen before 2009, and why did it become unstoppable after 2009? And, transferring those lessons to healthcare, why wasn’t healthcare uberized before now? What is making uberized healthcare desirable, and perhaps inevitable, today?

The Uber Revolution

Why did drivers and riders turn away from taxis and toward Uber and other ride-sharing services? In sum, Uber reduced inefficiencies, annoyances, risks and costs for both riders and drivers. The strengths of Uber compared with traditional taxis are listed in the table below.

How does today’s healthcare resemble the pre-Uber taxi industry? There are several similarities to the left-hand side of the table. We’ll refer here to physicians for brevity, though these observations also apply to nurses and other healthcare personnel. Problems in the current healthcare system that are similar to the problems with taxis include the following:

  • The ability to practice medicine is determined by public officials rather than by private institutions, much as taxi licensing boards regulate who can operate a cab. Plenty of capable individuals would like to practice medicine but cannot, due to effective limits on the number of licenses.
  • Many decisions in treatment depend on the physician’s knowledge, alertness and memory, when these decisions could be automated and reinforced, just as Uber has automated route choice and payment procedures.
  • Navigating unexpected events in the course of treatment relies on the alertness of patients and doctors, rather than making use of the remote monitoring systems that are now available—and more that could be available.
  • The process of making medical appointments is unnecessarily arduous, with patients filling in the same information time and time again.
  • Medical reimbursement rates are static, meaning that periods of peak demand are marked by shortages and long delays in getting appointments. There is generally no Uber-style “surge pricing” to induce doctors to work longer hours and weekends when demand rises.
  • Doctors’ hours are generally inflexible, whether the doctor likes it or not.
  • In contrast to the readily available information about Uber drivers and riders, information sources on the quality of doctors and their institutions can be unreliable and arduous to navigate.
  • Billing, payment and bookkeeping are onerous processes for both patients and providers.
  • A great deal of information still flows via antiquated fax machines.

The Ride-Sharing Inflection Point

Uber was founded in San Francisco in 2009. Prior to that time, the concept would have been impossible to implement because Uber relies on both drivers and lots of riders having GPS-capable smartphones with apps. The first cellphone with GPS was the Benefon in 1999—the same year that the BlackBerry smartphone appeared. But those devices were primitive by today’s standards, and market penetration was relatively shallow at first. The first iPhone was unveiled in January 2007, and the first Android device in 2008. Those set the stage for Uber. Moreover, taxi regulations were embedded across the country, with powerful protective lobbying arms in places like New York City. The public may have had its beefs with the taxi industry, but lack of alternatives is a fine distiller of complacency.

Steve Jobs famously said of the iPhone, “Every once in a while, a revolutionary product comes along that changes everything.” And he was right. It changed the taxi industry, and as we’ll discuss later, it changed healthcare. New technologies made Uber a feasible idea, initially in San Francisco and then across the country and around the world. Long-brewing public dissatisfaction with taxis came to the fore, and regulations dissolved before Uber’s moxie and the public’s desire.

In New York City, taxis had been granted a de facto monopoly via a cozy relationship with regulators. The number of available medallions (licenses) had been unchanged since the 1930s, and a single medallion sold for over $1 million. Taxis had the luxury of avoiding large swaths of the city. And riders often received poor, rude service in a filthy car. (Both of the authors of this essay lived in or around New York City long before Uber and knew those taxis well.)

Uber began in San Francisco and rapidly spread across America—often in areas with powerful taxi regulations. The company barreled through laws and regulations using a process our colleague Adam Thierer calls “evasive entrepreneurialism and technological civil disobedience.” The improvement over taxis was so apparent that city officials and the taxi industry were unable to muster the political power to prevent the ridership from switching to the new competition. In New York City, the cost of medallions collapsed to about an eighth of their former price. Similar trends are at play in healthcare today.

The Healthcare Inflection Point

Healthcare is undergoing a democratizing process similar to what happened to taxis in 2009—and for the same reasons. Technology is making possible what was previously unfathomable. Services that previously required a doctor can now be done by a nurse or technician—or by patients themselves with the aid of digital devices. Physicians, too, are now aided by diagnostic systems that relieve them of the need to remember everything about a patient’s treatment. Exclusive domains of healthcare providers are slowly opening due to the efforts of outsiders offering services via telehealth and other pathways.

Myriad new technologies are revolutionizing the healthcare industry. AliveCor and Apple Watch allow patients to take their own electrocardiograms and test themselves for atrial fibrillation in 30 seconds—anywhere and at any time. Parents with severely diabetic children can use Nightscout software to check their children’s glucose levels from anywhere at any time and intervene remotely to stave off insulin shock; their motto—a challenge to regulators—is #WeAreNotWaiting. Wearable or implantable sensors can track patients’ metrics far better than the patients themselves can in many cases; and artificial intelligence allows machines to sense difficulties faster than physicians would. Algorithms have always existed to guide practitioners—passed in antiquity by word of mouth from teacher to apprentice. But only now can they be digitized and automated.

Patients are no longer dependent on the doctors who happen to live within a 10-mile radius of their homes. Doctor on Demand, Teladoc and other services enable a doctor in one state to treat patients in other states via telemedicine. Heal enables patients to use an Uber-like app to summon a doctor to their own home or office. Large academic centers like the Mayo Clinic use telemedicine to bring complex specialty services, such as treatment for strokes, to rural emergency rooms. Remote prenatal ultrasounds and monitoring of fetal heart rate and uterine contractions allow high-risk pregnancies to be treated in underserved areas. Indeed, for decades radiologists finishing lunch in Australia have been paid to read CT scans for their colleagues in New York who are going to bed. Nearly 20 years ago a surgeon in New York, using telemedicine and the internet, robotically removed the gallbladder from a patient in France.

Neither providers nor patients can be complacent nowadays. Doctors are dissatisfied with their daily grind, and patients are dissatisfied with the processes they must wade through to get care. Family physicians complain of being nothing more than gatekeepers managing triage stations—deciding which specialist to refer a patient to. Paperwork requirements from insurers and the government are oppressive. Patients complain about waiting to obtain appointments and long wait times in the doctor’s office.

Though the healthcare industry was already evolving by 2019, the COVID pandemic of 2020 changed everything. The pandemic forced lawmakers and regulators to loosen age-old restrictions. Nurse practitioners could legally perform tasks previously reserved for doctors. Hospitals no longer had to beg permission from state governments to add hospital beds or medical devices. Doctors in one state could freely treat patients in any state. The Food and Drug Administration was forced to accelerate its approval of the COVID vaccines, which are now being widely distributed throughout the U.S. Medical school graduations were moved up several months, allowing new physicians to enter the workforce more quickly. If fixed hospital infrastructure was inadequate, floating hospitals could provide additional care. 

What Will Change?

Going forward, a great deal will likely change, but the effects of uberizing healthcare are impossible to predict. Great technological changes usually come from unknown geniuses in unexpected places—and shock the rest of us. The rest of us, including governments and corporate giants, are usually blindsided by pathbreaking innovations. Government agencies and incumbent corporate giants did not produce Uber or the iPhone or Amazon or Airbnb. Five minutes before Steve Jobs announced the first iPhone, the iPhone was unimaginable to the rest of us.

Markets will likely make our wildest dreams seem tame. But we can stretch out our necks and speculate a bit: Next-generation electronic health records will gather patient information in unified, convenient portals that providers and patients can use—and will want to use. Payment systems will be streamlined, as has occurred with Uber. Regulators will likely have far less leeway to protect industry insiders from outside competition. Doctors will compete for certain services with nurse practitioners, out-of-state doctors, former battlefield medics and patients armed with intelligent machines. Regulators will lose some of their capacity to preserve the status quo against the interests of patients and providers.

Just as Uber opened new pathways for quality control, we suspect that uberized healthcare will do the same. Uber has effective quality-control mechanisms in place to ensure their drivers are safe. Uberized healthcare companies have the same incentives. Patient-friendly websites will make it far easier to assess the quality of medical providers and the risks involved in treatment. Data will be plentiful, comprehensive and intuitive. Agents of the ancien régime will fight it every step of the way, but patients, we suspect, will be as enthusiastic about leaving the old world behind as Uber riders were enthusiastic about sending traditional taxi companies on their way.

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