The concept of a “virtuous cycle” refers to a self-reinforcing feedback loop that creates iterative improvements. (You might also be familiar with its less favorable cousin, the “vicious cycle,” which causes a downward spiral.) One well-known example of a virtuous cycle is the saying “fake it until you make it”: by acting confident, you’re more likely to achieve better results, which causes you to feel more confident in yourself — or so the idea goes.
Virtuous cycles are everywhere in the fields of business and economics. In this article, we’ll explore how virtuous cycles drive healthcare organizations to digitally transform their business, especially in the wake of the COVID-19 pandemic.
Case Study: Moderna’s COVID-19 Vaccine
The Moderna COVID-19 vaccine is one of the scientific success stories of the pandemic. With development beginning in January 2020 and clinical trials in April, Moderna’s vaccine was shown to have an efficacy of 94.5% in preventing COVID-19 infection—better than many experts were expecting.
Moderna, a pharmaceutical and biotechnology company founded only in 2010, is more than a century younger than other COVID-19 vaccine manufacturers such as Pfizer and Johnson & Johnson. What’s more, Moderna’s COVID-19 vaccine is the company’s first (and, thus far, only) commercially available product. So what has enabled a scrappy startup like Moderna to compete with these Fortune 500 giants?
Paradoxically, starting from scratch may be an advantage for young healthcare firms like Moderna. Instead of digitally transforming your business, building it from the ground up enables you to take a digital-first approach, leveraging cutting-edge technologies like artificial intelligence and machine learning from the get-go. According to the Harvard Business Review, for example, AI can boost the success rates of new drug candidates to as high as 50%.
Moderna CEO Stéphane Bancel agrees with this perspective, arguing that early digitization was key to the company’s success:
“I wanted Moderna to be a digital company from day 1. For that to happen, we needed the IT to be built right, even if it meant considerable investments at a time when we didn’t have revenue streams. Digitizing right from the get-go is much easier than doing this ex post on a legacy system.”
In particular, Moderna’s digital-first strategy has enabled the company to create a virtuous cycle, alternatively improving its data, algorithms, and products. By focusing on gathering data during the company’s early years, Moderna could train robust AI systems that help them design more effective drug candidates. In turn, this allows the company to collect a greater amount of high-quality structured data (e.g. during the research and pre-clinical production stages), improving the input for the beginning of the feedback loop.
Digital Virtuous Cycles for Healthcare Organizations
Of course, not every healthcare company has the advantage of starting from scratch like Moderna did — but this doesn’t mean that you can’t leverage the concept of the virtuous cycle for yourself.
For example, personalizing patients’ care and treatment has become a priority for many healthcare organizations concerned with digital transformation. According to a 2020 survey by Redpoint Global, 75% of U.S. consumers wish their healthcare experience were more personalized, and 71% report frustrations such as physicians’ impersonal bedside manner and difficulties scheduling an appointment.
Through harnessing the power of AI and machine learning, healthcare organizations can offer personalized, higher-quality care. Trends such as telehealth, wearable technologies, and mobile apps all make it easier for healthcare providers to automatically collect, handle, and analyze patients’ health data. By creating automated, standardized processes and workflows around this data, health providers can save on time, money, and effort both for themselves and for their patients.
As another example, hospital emergency rooms often need to deal with so-called “frequent flyers” (also known as “super utilizers”): patients who are repeat visitors to the emergency room, often due to acute symptoms of a chronic condition. These patients make up just 4.5%–8% of all emergency room visitors, but have an outsize impact on the availability of healthcare, accounting for as much as 21% to 28% of visits.
The frequent flyer phenomenon is problematic for several reasons. Not only can these individuals cause overcrowding and delays in care for other patients, they can also incur higher healthcare costs and a poorer standard of care for themselves by using the emergency room as their main point of entry into the healthcare system.
By collecting and analyzing data on which patients are frequent flyers in the emergency room (or likely to become one), healthcare providers can target these individuals for alternative care plans: for example, referring them to primary care physicians or outpatient services. This strategy can help lead providers to greater efficiencies, cost savings, and better health outcomes — not only for the repeat visitors themselves, but also for other patients affected by the delays. In 2015, for example, an $800,000 pilot program at the Sinai Hospital in Baltimore helped eliminate over 1,000 visits by frequent flyers in the first year alone, more than paying for itself.
The concept of the virtuous cycle has many applications, including in the healthcare industry. By working on digitally transforming just a single part of your business, healthcare providers can often realize a variety of positive multipliers and downstream ripple effects.
For more insights on digital transformation in the healthcare industry, and to learn about our past and upcoming events, visit the DigXchange website and follow us on our social media Facebook, LinkedIn and Twitter.
Image credits: Photo by Katemangostart on Freepik.