Every year, Americans spend more than $3 trillion on healthcare, a figure that is projected to rise to $5 trillion in the next decade. With healthcare spending approaching 20% of the U.S. GDP, a huge effort is underway to control costs. Not surprisingly, many believe that technology has a key role to play in increasing efficiency and reducing unnecessary expenditures, and significant investments in technology are creating opportunities for healthcare technology businesses.
Some of the most exciting businesses are upstarts, and some of them are making the API an integral part of their offerings. Take, for instance, companies like RxREVU, a Denver-based startup that is pioneering the concept of "prescription optimization."
The company has built up a database of more than 6,000 cost-saving medication recommendations based on 12 different cost-saving strategies. For instance, RxREVU can identify opportunities for savings based on the availability of generic medications and alternatives that provide similar therapeutic effects, including, in some cases, medications that can be purchased over-the-counter.
To build its database, RxREVU uses advanced data mining techniques to analyze years of peer-reviewed clinical studies, a complex and daunting task but one that has the potential to help drive dramatic cost savings. How dramatic? RxREVU points to a large insurance company that provided RxREVU with data covering 10 million patients and 16 million prescriptions. Based on that data, RxREVU was able to identify a whopping $387 million in possible savings.
"Right now, millions of people are struggling to afford their medications, and pharmacy benefit costs are skyrocketing for businesses and insurance companies," says RxREVU CEO Carm Huntress. "We think it’s time to solve these problems."
An API-based business
Identifying cost savings and getting them into the hands of the right people at the right time so that they can be realized are two different things. To ensure that its money-saving recommendations become actionable, RxREVU has made its primary method of delivery a RESTful API that allows the company's customers to programmatically retrieve recommendations and display them in their own applications. These applications submit their queries using a National Drug Code or drug name and RxREVU's API returns its recommendations in XML format.
RxREVU is targeting its API offering to several kinds of businesses, including healthcare and mobile application developers, insurance companies and electronic medical record vendors. Current customers include a healthcare transparency company that is using RxREVU's data with Fortune 500 companies.
RxREVU is currently participating in a three-year accelerator program run by Startup Health. It doesn't expect to find any friends in the pharmaceutical industry, if the company becomes, as Business Insider's Julie Bort puts it, the "Google of Drugs."