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Now in the consumer-centric healthcare spotlight: microsoft & walgreens

January 26, 2019 - 157 views

Now in the consumer-centric healthcare spotlight: microsoft & walgreens

The Walgreens-Microsoft partnership is yet another sign that consumer-centric healthcare is here. Here's how healthcare systems can join in.

We’ve been steadily predicting the formation of many unusual partnerships as the healthcare industry shifts toward consumer-centric healthcare business models. And our forecasts keep coming to pass: Think of CVS-Aetna, Cigna and Express Scripts and, of course, Amazon’s venture with JP Morgan Chase and Berkshire Hathaway. Now we can add Walgreens Boots Alliance and Microsoft to the list.

We didn’t just pull these prognostications out of the ether. We saw that new diagnostic, therapeutic and technology innovations were driving the industry toward an on-demand consumer-to-business (C2B) healthcare delivery model. And we knew that the new business, operating and technology models required by a C2B healthcare industry would challenge traditional healthcare companies, encourage new entrants and drive new partnerships.

Further, for the consumer-centric healthcare vision to become a reality, we’ve been watching for what we call a “McHealth” approach to patient care. The healthcare entity that wins at McHealth will have the scale required to invest in technology and process innovation to create a consistent, predictable and frictionless consumer experience for routine care. The winner will also have the geographic reach necessary to disrupt healthcare markets across the country and drive the industry closer to a true C2B on-demand care delivery model. 

By our measures, Walgreens provides the scaled geographic presence, healthcare know-how and distribution capability. Microsoft provides the technology innovation and the ability to help Walgreens build a digital backbone and the consumer-facing applications to deliver the experiences that today’s healthcare consumers demand.

Overcoming Challenges to Consumer-Centric Healthcare

But deploying McHealth on a wide scale could threaten the healthcare industry’s status quo.  To survive – or better, join in – the disruption, healthcare systems must recognize and address the following issues:

  • Legacy systems and processes. With its proven reliability, compliance and value, it’s time to get on the cloud, just as Walgreens announced it would do via Microsoft Azure. For new applications, healthcare organizations must go cloud-native; for legacy systems, cloud-based engagement layers and platforms rich in application programming interfaces (API) can mask disparities in underlying systems.
  • Data disparity. While more data is generated and captured digitally in many healthcare settings, it’s still difficult to share that data across systems – especially legacy applications – and with other health organizations. APIs can enable healthcare organizations to tap into their own data and make it available when and where it’s most needed, such as at the point of care. Data can also feed AI applications that uncover patterns in population and individuals’ health, enabling more effective preventive care.   
  • Price and quality transparency. The C2B world thrives on consumers’ ability to instantly see prices and peer ratings before they get in a Lyft car or make an online purchase. In a consumer-centric healthcare world, complex contracts with tangled pricing will drive consumers away. Healthcare organizations must develop simple, clear pricing, and offer quality ratings and feedback from other consumers.
  • Organizational resistance. Healthcare organizations are vulnerable to the technological and cultural forces changing business models, industries and consumer expectations. While there will be pushback from vested stakeholders and others at risk of being squeezed out of the industry’s value chain, providers and payers must adopt change management programs that help clinicians and employees understand the value of new operational models so they become allies in implementing them.
Achieving Market Leadership

As is usually the case with these announcements, the Microsoft-Walgreens announcement was long on promises and short on details, aside from the important point that Walgreens will port its infrastructure to Microsoft Azure. Yet the key ingredients for McHealth-style disruption – economic scale plus the digital backbone needed to support innovations in technology, business models and customer experience – are there. 

We think the first new entity to achieve a solid, frictionless, day-in/day-out McHealth execution for healthcare consumers will gain an important advantage. None will achieve that without addressing the obstacles above.

A final thought: Smaller and/or specialized healthcare organizations may have an outsized influence on McHealth. Just as big companies buy entrepreneurial companies to access and scale their operational models and capabilities, healthcare organizations that develop their own smart consumer-centric healthcare models may find they can influence the ultimate McHealth entities.

Digital Business & Technology , Platforms & Industry Solutions healthcare , future of healthcare , consumer-centric healthcare , mchealth , consumer-to-business healthcare , c2b

Patricia Birch

Patricia (Trish) Birch is Senior Vice-President & Global Practice Leader, Healthcare Consulting, at Cognizant. In this...

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