The healthcare industry in the U.S. is uniquely ripe for transformation. It is a dynamic and growing market with rampant inefficiencies that attracts new technology-savvy players seeking opportunity. Case in point: Ecommerce giant Amazon recently entered into a joint venture with Berkshire Hathaway and Chase Manhattan to enter the healthcare space. Amazon’s health offering will disrupt long-time insurance incumbents like Blue Cross, United Health Care, Aetna, Humana and Cigna.
This competitive repositioning will force employees to change the way they consume healthcare (i.e., go to the doctor, fill prescriptions, etc.). Companies that begin to plan now for this change will have a significant advantage over those that wait.
In this post, we’ll take a look at some of the key factors driving healthcare disruption and outline several best practice steps you can take to position your company for long-term success, including:
- Don’t do it alone
- Prioritize the disruption
- Accelerate innovation
- Extend traditional boundaries
Market forces are accelerating the pace of change
In healthcare, progress has moved forward in fits and starts. Overall, however, the pace of change is accelerating. We’ve already seen consumers shift away from brick-and-mortar stores in other markets, and it was only a matter of time before healthcare followed the same pattern.
Consumers are accustomed to quick responses, electronic access to information, and the ability to be more engaged in decision making. With purchasing power tilting more in favor of consumers, it’s natural that they would opt for more easily accessible options when seeking the healthcare services and products they need.
The forces that have managed to disrupt other markets—from travel to media to retail—have so far made only slight intrusions into healthcare. But that is changing. Big technology companies like Google and Apple are also moving into the healthcare space, bringing unique capabilities such consumer recognition, extensive supply chains and powerful analytical capabilities—all backed by vast financial resources.
Other market entrants adding to the disruption include leading pharmacy retailers such as CVS and Walgreens, which are integrating their e-commerce systems with their numerous retail outlets and walk-in clinics to create new healthcare delivery platforms. All of these efforts seek to address long-time service delivery shortcomings while leaping ahead of incumbents.
In the coming years we can expect a number of industry trends to play a central role in re-shaping the patient care and healthcare delivery landscape.
- Data as a strategic asset. One of the most valuable resources in healthcare is data. Access to data and the ability to leverage that data is essential to creating consumer-centric models of care, improving outcomes, and reducing costs. To that end, many traditional technology players today are building connected tools, wearable devices and healthcare applications, allowing patients to track and monitor their treatment progress and send data back to the healthcare provider. Meanwhile, insurance companies are partnering with drug manufacturers to utilize patient data to personalize patient care and improve the consumer experience.
- Better decision making through AI. According to Accenture, the artificial intelligence (AI) health market is expected to grow to $6.6 billion by 2021—a compound annual growth rate of 40 percent. A number of factors are driving that growth:
- Patient management. AI tools can help doctors and insurance providers better identify and prioritize patients to deliver the optimum level of resources to minimize costs and enrich patient outcomes. The technology will be instrumental for analyzing large volumes of data to evaluate and develop future treatments.
- Diagnostic insight. AI is assisting researchers and doctors in diagnosis and understanding of complex diseases. Case in point: the FDA recently approved artificial intelligence tools to detect bone fractures and diabetic responsiveness in patients, helping to reduce time from onset to therapy.
- Labor shortages. AI tools can help reduce the burden of providers performing documentation and data management. They have also proven highly effective in helping triage patients so doctors can focus on patients with the most critical need.
- Patient management. AI tools can help doctors and insurance providers better identify and prioritize patients to deliver the optimum level of resources to minimize costs and enrich patient outcomes. The technology will be instrumental for analyzing large volumes of data to evaluate and develop future treatments.
- Managing social determinants. Most health outcomes are the result of circumstances outside the healthcare system. These social determinants, such as the conditions in which people are born, live, work and age, undergird many of today’s healthcare challenges. As social determinants become a greater focus in healthcare treatment and delivery, care spending is expected to drop while quality of life would improve for impacted communities. In many areas, this has already begun, as hospitals and health insurers work with local health departments to identify social determinants and address community health concerns.
Taking a strategic approach to transformation
With the healthcare market poised for major disruption, business leaders are rapidly developing strategies to remain competitive. Disruption is not all doom and gloom. With the right approach, it can be as much of an opportunity as it is a threat. How you respond can make all the difference. Following are some best practice steps that can help you take control of your response effort and better position your company to capitalize on this market shift.
- Don’t do it alone. Working with a strategic employee benefits broker is essential for gaining an edge and avoiding obsolescence in today’s fast-moving digital world. Find digital-savvy partners willing to challenge traditional thinking and make sure your strategic approach is aligned with market realities. The right broker will ensure your business is not only poised to adapt to any market changes, but will also leverage those changes to your business’ advantage.
- Prioritize the disruption. The scale, the reach and the quality of the experience are three dimensions in which digital disruptions can be viewed. Your ability to accurately assess these dimensions can provide important market advantages. How will the disruption effect your business and your employees? With new value will it bring? What challenges will you need to tackle? How will it impact other aspects of your business operations? Disruptions that impact two or more of these elements should be given priority focus.
- Accelerate innovation. To survive and thrive in the digital era, companies must be able to innovate faster than their competitors. Driving innovation at this speed requires a culture that encourages and celebrates innovation. Many organizations have little tolerance for risk or failure, but risk-taking is the lynchpin to innovation. Companies that encourage creativity, set bold objectives and aren’t afraid of failure are better equipped to succeed in the face of market uncertainty. While innovation is vital to your response strategy, ultimately your company’s core goals and mission should drive your business focus and transformation initiatives.
- Extend traditional boundaries. Carefully examine what organizational changes your company may need to become more collaborative and open. This requires an objective and honest assessment of people, processes, and technologies across the organization. Be prepared to question beliefs based on history, long-held practices and accepted patterns. Consider why and how these beliefs are held and assess and weigh current practices to previous patterns. Set aggressively high targets that extend traditional boundaries and requires people to think outside the box. A willingness to break from established practices can open the door to creativity, allowing your team to see the possibilities often hidden behind the status quo.
Key Takeaways
When it comes to pioneering innovation, the healthcare industry presents a paradox. Although life-changing medical breakthroughs often come about at a rapid pace, the manner in which healthcare is delivered has been painstakingly slow to improve. But change is indeed coming and the winners will be those that figure out how to best prepare for, navigate, and benefit from this massive disruption.
The one decision business leaders need to make when it comes to healthcare disruption is how to respond to it. Taking effective action will often requires leading a journey into unfamiliar territory using new tools and processes. Uncertainty is inevitable. Instead of trying to change that, explore what is technologically possible, understand the risk-reward tradeoffs, and then rally the best resources to bring the vision to life.
Whatever the approach, one thing is certain: disruption waits for no one—there’s no time to waste in moving from awareness to action.