Can a Sharing Economy Create Value for Hospitals, Patients and Taxpayers?
Think of what you share today – I share a car with other travelers, as I rent a car every week when I land in a new city for work; I share a bedroom, as I rent a room at the local Hilton property every time I land in a new city; I share a table, as I sit in a crowded restaurant in the airport while I wait for my flight; to tell you the truth, as a traveling man I share quite a bit. Is this going to change for all of us soon? Sure seems like it. When Google Ventures believes in it, I guess it’s time for us all to get behind the trend, they’ve been right quite a few times this past decade, haven’t they? As Joe Kraus, from Google Ventures comments, “the sharing economy is a real trend. I don’t think this is a small blip. People are really looking at this for economic, environmental and lifestyle reasons. By making this access as convenient as ownership, companies are seeing a major shift.”
Cohealo is opening this sharing economy in healthcare, providing medical equipment to health systems through a model of ‘access instead of ownership’, which we believe will help drive costs down in healthcare. The ‘share economy’ will surpass $3.5 billion this year, as more and more companies are offering this type of service in 2013, breaking down the traditional industrial models that these companies have built over decades and decades of investment. Why is this so important for not only Cohealo, but also for patients and for healthcare as a whole? Because the overlying story in the US healthcare industry is waste, $2.3 trillion dollars are spent each year by the US Government for healthcare and there are many studies that prove waste in the billions of dollars. If we could remove hundreds of millions in waste, how would that affect each of us? Could we reduce the burden on tax payers, the cost of care to patients, the cost of running a health system for administrators, or maybe all of the above?
A sharing economy is a more progressive economy, and really – isn’t that what the US really has become, the most progressive economy in the world? One of the questions we get from clients and prospects all the time is whether or not Cohealo provides real value or if we just displace existing value, and as the author of this article says, the answer is surely both. “It’s classic creative destruction. But long term economic efficiencies result, and that’s ultimately good for everyone.” In the example provided regarding AirBnB, the ‘spillover effect’ saw that because renters on AirBnB spent less than they would have with hotels, they were more apt to spend more at local establishment, nearly $300 more over a weekend. And, 14% of all AirBnB clients said that they would not have taken the trip if they weren’t able to book the lower room fare – this translates into thousands of visitors to a city each month, quarter and year.
Cohealo’s ability to shift capital investment dollars away from redundant medical devices allows our clients to invest in other technologies, new infrastructure, additional clinicians and other staff, allowing the overall market to become more efficient. We are excited about the development of the ‘sharing economy’ and look forward to sharing with you all about our success stories in the future.