Editors’ Note: This post is part of a series on Consumerisation of Care. Follow the conversation and learn from industry experts using the Twitter hashtag #mtf2014.
Digital technologies are changing how companies innovate, interact and do business. Consumer industries such as retail, electronics, and telecommunications already use digital technologies to more closely connect to customers, better understand their needs, and be more responsive. As patients transition from passive care recipients to active value-seeking consumers, it is medtech’s turn to master these tools as new competitors chip away at the market.
According to the 2014 PwC Global Innovation Survey, drug and device companies are placing bigger bets on innovation than other industries are. But nearly half are focusing on traditional product innovation as the top priority, rather than on service and business model innovations that could help them prove their value beyond the efficacy and safety of their drugs and devices. Leading companies are now investing in digital tools to create new revenue streams from data, optimise outcomes, and create tighter patient engagement. But as healthcare’s incumbents inch toward a value-driven world, their customers, the patient, are signaling they may not wait.
A new survey by PwC’s Health Research Institute (HRI) found that consumers are willing to abandon traditional care venues for more affordable and convenient alternatives suggesting billions in healthcare revenue are up for grabs. Walgreen Co. President and CEO Gregory Wasson told investors at the JP Morgan Healthcare Conference in January 2014 that it intends to continue to grow share not only in the growing pharmacy market, but in the larger and growing healthcare space as well. With its acquisition of AllianceBoots Walgreen is unique in its global footprint and breadth of capabilities that will accelerate the consumerisation of care.
Non-traditional players such as Walgreen, Samsung, Google and other new entrants are in the vanguard of a new health economy, the next era in the health sector’s slow transformation to a truly consumer-centred, competitive market. Non-traditional players are creating these new modes of care—from home diagnostic kits that snap into smartphones to online services that triage and prescribe treatments based on computer algorithms. They are striving to be the disruptors that transform health, similar to the shakeups sparked by Amazon.com, Alibaba or Apple. Consumers’ willingness to abandon traditional care models echoes the experiences that have reshaped the banking, retail and entertainment industries.
Do-It-Yourself, or Nearly-Do-It- Yourself, healthcare is growing as once-complex conditions and diagnoses become simpler and cheaper to manage at home. Witness retail shelves of over-the-counter pregnancy tests, HIV tests and proton pump inhibitors. Or the evolution of the threat of Streptococcus infections, from health menace in the pre-antibiotic era to curable disease on the brink of being able to be diagnosed at home by mom. Technology companies and academic medical centres are learning to digitise and democratise medical expertise so healthcare systems can deliver top care virtually anywhere.
Every player in this democratised health system will be connected wirelessly by telecommunications companies, which have developed cloud storage, big data analytics and security services, often with embedded telemedicine and other care services. Niche players will proliferate, using technology to cater to specific needs of small “orphan” patient populations.
Survival will depend upon developing new ways to service a decentralised market and medtech’s success will depend on its ability to compete and deliver results that focus on customer’s needs and desires. Can the medtech industry deliver the technological and business model innovations to succeed in the new health economy?
Find out more at this year’s European MedTech Forum and at PwC
– Brian S. Williams, PwC, Director, Global Healthcare Strategy
