5 forces driving ‘seismic change’ in healthcare

A new report from Pricewaterhousecooper’s Health Research Institute (HRI) tries to identify “a vision for US New Health Economy” over the next decade, breaking down shifts in healthcare to five separate areas driving “seismic change.”

The study opens by saying both established and newer company will likely have to re-evaluate how they do business in this changing landscape, either by exploring new markets, focusing on value-based care, providing new technology or better understanding consumers, while not letting the existing healthcare industry culture hold them back from new opportunities.

1. The rise of consumerism

Whether driven by insurance companies and government payers shifting the burden of care to consumers or the proliferation of new options like retail clinics and wearable devices, the report says consumer-oriented trends are dominating healthcare. The challenge is getting those consumers to understand and engage with these new options.

“Organizations have the opportunity to bridge this gap through consumer education, and more consumer-centered design of services and products,” the study says. “These strategies may lead to better outcomes.”

A key to achieving that goal, according to the report, is segmenting consumers, saying Hispanics have shown to be “ready for the new ecosystem” by engaging with new tools. Consumers with chronic conditions, however, are the least engaged, a troubling sign considering their high utilization of healthcare services.

2. The shift to value-based care

A more well-documented trend compared to the rise of consumers, the push by insurers and federal agencies away from volume will affect several healthcare sectors, according to the report.

“Two markets—care delivery and financing and payment—likely will face slowed growth over the next decade,” the report says. “The $2 trillion care delivery market, the realm of organizations such as hospitals, physician practices, home health companies, retailers and other care providers, is expected to endure a swarm of small revenue cuts over the next 10 years. Nearly every trend identified by HRI will land a blow on care delivery.”

The transition to value-based will also slow growth in financing and payment.

3. Technological advances and digitalization

The report calls this area “a looming tidal wave.” In one example, 3D printing in healthcare is considered limited at the moment, but the report points to its “toehold in the dental industry” as a sign it could soon make an impact in pharmaceuticals.

“This spring, Aprecia Pharmaceuticals began selling Spritam, a printed treatment for patients with some forms of seizures and the first FDA-approved 3D printed medication,” the report says. “the treatment is designed to quickly disintegrate in a patient’s mouth with a drink, making it easier for some patients to take the medication.”

These advances can also be related to value-based care, such as with a biosensor developed by Proteus Digital Health which can be placed within medications and send a signal when the treatment has been ingested. That information can be recorded for the patient as well as clinicians.

“Digital enables the ability to shift the model from volume to value,” says Proteus President and CEO Andrew Thompson.

4. Decentralization

The availability of retail clinics and telemedicine hasn’t shifted healthcare too drastically, but the report offers survey results which suggest that may change.

In 2006, fewer than 10 percent of consumers surveyed by HRI had visited a retail clinic. A decade later, that number is up to 42 percent.

Telemedicine appears to have untapped interest from consumers, with 42 percent saying they’re interesting in using those services in exchange for lowering costs, but only 1 percent reporting interacting with a primary care provider via vide.

5. Growing interest in health management and wellness

The report encourages companies to think of wellness as “more than Pilates and weight loss programs,” estimating the wellness market could grow into a $276 billion market over the next decade.

“Organizations looking to play in the wellness market should consider their analytical capabilities, and be ready to partner, collaborate or purchase those assets if they are lacking,” the report says. “Traditional healthcare companies should identify these companies and develop processes to identify ideal partners.”