Report details healthcare shift ushered in by tech ventures, transparency

The healthcare industry is on the cusp of a major change as technology companies support a consumer-driven industry that will shape the way healthcare is delivered, according to a report from Oliver Wyman.

Innovative technologies, transparent marketplaces and consumer power are changing healthcare in an era the reports calls  “Health Market 2.0." It cited increases in investment, noting that in 2010, only 17 healthcare-focused software companies received Series A investments of $2 million or more while that jumped to 89 companies in 2013.

The hospital inpatient business, in particular, will dwindle by 25 percent initially and then by 40 percent over a longer period as clinics and telehealth grow in popularity, the authors concluded.

In other conclusions, the report predicted that most surgeries and diagnostic procedures will take place in low-cost outpatient facilities, cutting prices by as much as half. Also, specialized "smart care" teams will replace single-specialty practices by excelling at chronic disease management, prevention and non-acute interventions. They'll also provide 25 percent of traditional primary care services to begin with, and 60 percent down the road.

All of this will be propelled by accountable care organizations and patient-centered medical homes, according to the report.

“As Health Market 1.0 gives way to Health Market 2.0, we expect to see an industry dramatically different from today’s: 24/7, convenient, enhanced by technology, holistic and personalized, with prediction and prevention making us much less reliant on cures,” according to the report. “The line that has long separated healthcare from retail will be more and more difficult to see as retailers, wellness coaches, pharmacies, tech companies, and others start to play a far more significant role in keeping us well—and, in the process, capture a trillion dollars or so of annual healthcare expenditures.”

Read the full report.