In discussions with our clients, it’s become apparent that one of the greatest changes we’re witnessing in healthcare is the disaggregation (or unbundling) of care. Historically, access to and delivery of healthcare took place primarily in doctors’ offices, hospitals and clinics. However, changes in consumer sentiment and advances in technology are creating a far more diverse and widely distributed landscape of wellness and treatment options, including wearables, remote monitoring, urgent care clinics and retail medicine.
The implications of the disaggregation of healthcare are huge, and opportunities abound for savvy and innovative biopharma and medical device companies, along with new entrants to healthcare. The first step in taking advantage of the change, as ever, is to understand its dimensions.
The Unbundling of Care
Just as software and hardware have combined in smartphones to forever change how we bank, shop and engage with friends, entrepreneurs and corporate behemoths are using these same capabilities to revamp where and how we access care. Since the passage of the Affordable Care Act, which expanded healthcare access to over 22 million U.S. consumers, and the 2013 Mobile Medical Applications guidance document released by the FDA and revised in 2019, retail and app-based care solutions have exploded.
As of 2018, an estimated 3,000 retail clinics were operating in the U.S., and over 300,000 health apps are now available, with nearly four billion downloads in 2017 alone. These advances are driving expanded access to care in urban areas and maintaining or expanding care in rural regions. In addition, advances in state licensure are allowing more nurse practitioners, physician assistants and registered nurses to deliver healthcare services.
The disaggregation of healthcare is occurring simultaneously with other significant, sometimes evolutionary shifts:
- Empowered consumers/patients, as evidenced by developments such as the online review. Patients now expect when-and-where convenience for accessing healthcare. Among the plethora of user-empowering healthcare access options now available, we’re seeing direct-to-consumer alternatives to pharmacies, like Nurx and Roman; home-based testing services, such as 23andMe; virtual primary care, like Sherpaa; and telemedicinal services, like Teladoc and Doctor on Demand.
- The increasing pivot to user (customer) experience as a driving competitive factor.
- Technological advances such as telemedicine, asynchronous communication (chat, messaging, etc.) and the increased use of structured data.
- The advent of value-based care.
- Pricing transparency, such as the Surgery Center of Oklahoma’s web-based tool.
Cloudy & Cool: The Disaggregation Forecast
The disaggregation of healthcare presents both promise and peril to biopharma and medical device companies. On the positive side is the expansion of the market and the opportunity to help more people live healthier lives. On the negative side, it can result in healthier lives being realized through nontherapeutic interventions, negating the need for biopharma or medical device treatments. Further, when a clinical intervention is required, activities and data from outside the clinical setting are needed to document that a clear health outcome – aka, value – has been realized by the patient.
To succeed in a disaggregated care environment, biopharma and life sciences companies need to focus on these areas:
- Data: Project Nightingale, the Google-Ascension collaboration to develop point-of-care tools for clinicians based on a targeted 50 million patient records, is an example of how data is being pursued for predictive health benefits. Ultimately, the opportunity is for both preventive and predictive uses, which requires clinical and nonclinical data. Cognizant’s LEAF, an evolutionary computation platform, is being deployed to help life sciences and healthcare clients integrate and interpret data in support of clinical and health outcomes.
- Code: In a technology-enabled care delivery environment, the ability to develop, deploy and maintain software that meets business objectives, as well as potential regulatory compliance, is a competitive differentiator. Cognizant Softvision is working with a leading global biopharma to develop and deploy an agile, pod-based infrastructure to support app and analytics platforms.
- Partnerships: When care is disaggregated, collaboration becomes vital to success. In our view, the market leaders will be those that develop the governance models and processes to effectively establish and manage partnerships. Early examples abound, such as Apple’s partnership with Sanofi or ResMed/Propeller’s collaboration with Walgreens.
- Nontherapeutic interventions: By engaging with consumers and collaborating with health and wellness companies, biopharma and medical device companies can extend value beyond the moment of intervention. We helped one of the largest biopharma manufacturers develop an app for its top-selling therapy that not only achieves basic objectives of enrollment and engagement but also provides consumer insights on how activities such as exercise and diet can improve health outcomes. As manufacturers realize the challenges and opportunities ahead, demand from the biopharma industry is exploding for holistic solutions whose deployment may come at the expense of traditional script-based revenue.
We’ll look at the disaggregation of healthcare further in future months. In the meantime, our next blogpost explores one of the themes mentioned above: the rapidly emerging value-based care paradigm.
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