In 2016, millions or American consumers will have their first video consults; be prescribed their first health apps and use their smartphones as diagnostic tools for the first time. 2016 also will be the year that many Americans, faced with higher deductibles, manage medical expenses with new tools and services rolled out by their insurance companies, healthcare providers, banks and other new entrants.
This will be the year that, shift by shift, visit by visit, nurses doctors and other clinicians learn to work in new ways, incorporation insights gleaned from data analysis into their treatment plan.
HRI’s main findings this year:
• Adoption of health-related smartphone apps have doubled in the last two years. In 2013, 16% of consumers said they had at least one health app on their device.Two years later, 32% said they did. HRI also found that millennials, who are enthusiastically embracing wearables and health apps, prefer virtual communication for health interactions.
• Well-known healthcare brands may have a market advantage. Consolidation is creating larger health systems and insurers. These moves make branding critical. HRI’s 2015 consumer survey found Americans are willing to drive further to receive care from a wellknown system, signaling receptiveness to brand over convenience. Many consumers, however, say they are not willing to pay more for care delivered health systems considered “best in field.”
• Nearly 40% of consumers would abandon or hesitate using a health organization if it is hacked.Medical devices from pacemakers to infusion pumps are becoming more connected, but also more vulnerable to breaches and cyberattacks. More than 50% of consumers told HRI they would avoid, or be wary of using, a connected medical device if such a breach were reported.
In 2016, the health industry will begin to lay down rough new paths to a more connected, transparent, convenient ecosystem. Eventually these paths will develop into well-trodden trails, roads and highways. This hard work — this forging of new ways of receiving, paying for and delivering care — is a hallmark of the creation of a New Health Economy, an industry that is more digital, nimble, responsive and focused on consumers. As organizations master these tools and services, they will combine them in new ways, form new partnerships and ultimately transform the industry.
PwC’s Health Research Institute’s annual Top health industry issues report highlights the forces that are expected to have the most impact on the industry in the coming year, with a glance back at key trends from the past decade.
Implications for your business:
Consider the unconventional. Innovative partnerships – achieved through joint ventures or loosely structured alliances – provide flexibility. M&A activity also is increasing around new entrants providing services, often outside of the traditional system, that are gaining traction with consumers. Regulatory scrutiny will only heighten as consolidation continues, and those who go to market in unconventional ways may be better positioned to address it.
Capitalize on integration. Successful acquisitions hinge on well-executed integration. Investing heavily in up-front planning efforts focused on consumer value will help ensure that strong brands are not diluted through poor execution.
Plan around strengths. Smaller regional and niche players without well-defined strategies could quickly become targets. These systems should focus on products and service offerings considered best in class, and align with those providing complementary services to round out offerings.
Look to remote regions and emerging markets for innovation. Necessity is the mother of invention, and innovative uses of connected tools will come out of remote and emerging regions. For example, India’s DoctorKePaas sets patients up with smart home monitoring kits, which wirelessly connect to the company’s online platform. From there, patients can connect with a range of clinicians, from dermatologists to cardiologists to fertility doctors, who conduct virtual examinations and can prescribe remotely.
Build virtual medicine into long-term strategic plans. Health systems should re-examine long-term capital investments in light of virtual medicine, including moving from centralized brick-and-mortar plans to decentralized investments featuring partnerships, joint ventures and new roles in the New Health Economy. From “bedless” hospitals to smartphone medicine, a growing share of care can be delivered remotely.
Seize a new role. Just as retailers’ move online created new roles for companies that could help with mobile payment, app creation and digital advertising, healthcare’s shift into the palms of consumers’ hands will set off an explosion in new industry needs. Organizations will need help managing utilization, connecting fragmented healthcare providers and overseeing data. There will be a need to evaluate tools with security, privacy and risk in mind. Connected tools will create fresh links to industries that rarely interact with healthcare such as retail, financial services and hospitality– and generate opportunities to plug in.
Care moves to the community
Hospitals need to develop a community extension strategy. Pressure on margins will continue to necessitate a move away from inpatient care. Infrastructure for community hospitals, bedless hospitals and virtual care centers require large capital investments (see figure 8). Hospitals will need to determine if revenue gains from a selected strategy outweigh the upfront costs.
Partner with retail clinics if capital is tight. Partnerships with retail clinics provide a less capital-intensive option for moving patients to outpatient settings. The percentage of consumers who have visited a retail clinic increased from 10% in 2007 to 36% in 2015, according to HRI’s consumer survey. Retail clinics are expanding services and consumers are noticing – of the 36% of consumers who have been to a retail clinic, 11% received chronic disease management services.
Health systems should keep an eye on the consumer experience as they expand and extend. More partnerships and more caregivers could mean confusion for patients and poor customer experiences. According to HRI’s survey, 52% of patients said that it’s “very important” that they have one physician coordinating care. Health systems partnering with post-acute care providers such as home health and nursing homes should be particularly focused on reducing fragmentation.
Multiple stakeholders will influence biosimilar use. Integrated delivery networks, insurers, purchasers and physician groups participating in quality- and outcomes-based payment structures can fuel adoption of biosimilars as a cost-containment strategy. Integrated health systems should encourage patients to switch to biosimilars when appropriate, or begin new prescriptions with biosimilars.
Product services differentiate brands from biosimilars. Pharmaceutical companies seeking to defend the market position of their products against biosimilars should offer and promote complimentary services – such as mobile apps, patient education and financial assistance– to build brand loyalty and discourage patients from switching to lower-cost alternatives. Biosimilar makers also may need to advertise the availability of new products, an expense that may prevent deep discounts against the original biologic.
Physicians appreciate low-cost options. Adding a biosimilar to a broader therapeutic portfolio of branded therapies can help pharmaceutical companies engage physicians and promote trust by providing a lower-cost option among premium products. For oncologists and their patients, a biosimilar marketed alongside branded cancer drugs could help to ease the financial burden of treatment. Partnerships between brand pharmaceutical companies and biosimilar manufacturers allow both to combine and leverage their respective strengths in the market.