Sydney: September 13, 2015
The rise of IT, connectivity and mobility has enabled tremendous shifts in the modernisation of health care. A myriad of new and impending changes within the entire gamut of the healthcare industry across the world will see some major themes emerge in the new healthcare economy.
Healthcare trends necessitating business model innovation include an industry-wide shift in focus from acute care to prevention and wellness, a growing emphasis on predictive, preventive and personalised health and healthcare delivery, a systematic shift in the point-of-care delivery (with provider organisations beginning to take a back-seat), as well as the increasing influence and importance of data and the emergence of data-oriented products and services in healthcare.
The business model transformations impacting the healthcare industry are the perceivable shift in target customer from payors and providers to patients and consumers, the emergence of business-to-consumer (B2C) models, (although business-to-business (B2B) models continue to have a stronghold on the industry), B2B models shifting from a product-oriented value proposition to a service-oriented one, and the growing influence of eCommerce, mCommerce and social media in healthcare.
As patients become increasingly involved in their individual healthcare, as clinical practice moves from intuition based decisions to more analytics and data based approaches, as costs of care to government and private payors spiral upward, healthcare providers and companies are compelled to revamp strategies and rethink new methods and models for payment of healthcare services and products. ?Moving away from historically operating in distinct silos, the healthcare industry is being driven to integrate; with companies seeking new types of partnerships and collaborations, as well as dealing with a rising breed of new competitors brought in by the institution of IT based tools and services,” says Rhenu Bhuller, Partner and Senior Vice President, Healthcare, Frost & Sullivan.
Customers are demanding optimisation of outcomes and costs, and expectations are altering dramatically as decentralisation and virtualisation of delivery of care is able to facilitate customised care to best suit the individual and their family and enable anytime and anywhere access, with information transmitted and shared in real time between individuals and caregivers. The use of IT and sensor based tools to provide guidance and support will help avoid errors resulting from misdiagnosis of issue, procedural errors, and errors in medication administration. The most innovative companies in healthcare are those looking to improve quality of treatment while simultaneously collapsing extraneous tasks and costs tied to legacy processes.
As stakeholder roles and expectations change, there is creation of both opportunities and challenges in customer and partner interactions. The one-size-fits-all approach that has dominated the healthcare industry is slowly giving way to the consideration of more unique customer segments where each type of consumer is differentiated by expectations, needs and means to participate in the healthcare system. ?Depending on the individual, there is potential for plans and solutions that are tailored to segmented needs, and specialised user groups offer opportunities to personalise and differentiate services.
Many needs means many models, but the 6 big themes that will drive new business models in healthcare are scalability, decision support, process change, customisation, integration and services to enhance product delivery.
Customer-to-customer (C2C) will be the next stage of business model evolution in healthcare and companies will need a robust data-strategy that can inform all aspects of its business. A customisation-oriented business model can be a key differentiator in healthcare and healthcare companies should be prepared for an overhaul of their current sales ecosystem. The healthcare value proposition must move beyond products and services to social benefits that enable people and companies to create better societies.
?The value proposition business model is a key factor”, Bhuller says, citing the example of Novo Nordisk?s model of working alongside partners in primary and secondary care, providing support and advocacy, collaborating with community champions and driving awareness about diabetes. ?It is about pooling resources, joining forces, and working as a team with different stakeholders in the community. This encompasses a product as a service model, and Novo Nordisk is a forerunner with this approach. The catalyst for significant differentiation are companies that create personal, customised options for their customers and who cooperate with partners to increase the spectrum of the ?customer to customer model of healthcare as well as incorporate a socially beneficial aspect into the business that helps payors and consumers improve their lives and the lives of others,” Bhuller said.
She added, ?Another value-for-many example is Alive Technologies?s ?livecor Mobile ECG app and attachment which uses technology to digitise and democratise, giving users portability and more control of regular monitoring of their heart conditions with ECG reports automatically updated and available for remote doctor review as well as the option for reports to be uploaded to EHRs through the app, potentially reducing doctor visits.
As with any change, there are challenges and threats and the key ones Frost & Sullivan identified for market participants are:
Lack of information on potential competitive threats as non-healthcare companies expand into the industry
Business model sustainability in an environment that is experiencing rapid changes in technologies and regulations
Identifying innovative, futuristic healthcare products and services that will give the company a first-mover advantage
Developing relevant and sustainable industry partnerships
