Wednesday, October 7, 2015

Consumers Driving Healthcare Innovations


Everyone in the U.S complains about healthcare—the rising costs of insurance premiums and co-pays, the lack of innovation, the poor experience at doctor’s offices and hospitals, and price of medications. 

The landscape of big healthcare is eroding faster than the biggest players can adapt.

Thanks to malpractice, the internet, the rise of specialists and decline of general practitioners, integration with complementary and alternative medicine, and other factors—consumers feel as if they must drive their own healthcare. 

Gone are the days when actions are blindly followed, as in “the doctor told me to take this __________________ and do __________________.”  Instead, internet research leads to second-guessing and attempts at self-diagnoses. Both scenarios lead to information anxiety. Too little and too much unfiltered information causes this quiet despair. The emerging paradigm finds consumers lost, bewildered, looking for sources and solutions that help make health care make sense for them—and willing to switch to what works for them. 

This tension creates a gap of opportunity for disruptive entrants into the market. With 2.8 trillion at play, everyone will race to get their piece of the pie, from well-established companies outside of healthcare, to service providers offering new models of care, to start ups. Hopefully, healthcare companies will recognize the need to transform their business model and their product and service mix, or risk dying on the vine. 

A recently released study by the Health Research Institute (HRI) called “Healthcare’s New Entrants: Who will be the industry’s Amazon.com” The threat to the established players is made plain: “Revenue will circulate differently, and to many new players. Consumers, spending more of their own money, are exerting greater influence and going beyond the traditional industry to find what they want and need. In the New Health Economy, purchasers increasingly will reward organizations providing the best value, whether it’s an academic medical center, a tech company with a great app, or a healthcare shopping network. 

Traditional providers have not yet caught the tide of change, nor have they figured out how to diversify their revenue steams. A single innovation can put a huge dent in the market. For example, if half of all U.S. patients opted to administer an at-home strep test, it could hurt the traditional provider network as much as $68 billion. This move would benefit consumers, the company that makes the test, and the retailer, but is a seismic shift for doctor office revenues. 

Huge players are scrambling to make an impact: Walgreen’s, Google, Time Warner, Target, as well as an increasing number of healthcare technology start ups. 

Who will win? The ones who listen to consumers, as they are the driving force of the change. 

Michael Graber is the managing partner of the Southern Growth Studio, an innovation and strategic growth firm based in Memphis, TN. Visit www.southerngrowthstudio.com to learn more.

No comments: