Over the next five years, industry experts predict big changes that will significantly impact managed care. These range from state governments getting more involved in healthcare to more online retailers throwing their hat in the healthcare ring.
“As industries continue to blur, traditional healthcare companies will need to break down silos to drive value across the industry ecosystem,” says David Friend, MD, MBA, chief transformation officer and managing director, The BDO Center for Healthcare Excellence & Innovation, a healthcare accounting and consulting firm. “To compete with disruptors, healthcare companies will need to capitalize on data, maximize profitability, and innovate patient care all while managing growing risk in the areas of patient privacy and data security.”
It's a daunting challenge, but preparation can help ensure success. Here are some of the biggest areas of disruption that could impact your organization.
This year a flurry of discussions and deal-making occurred between retailers and healthcare organizations, Friend says. This includes:
- Walmart’s reported early-stage talks to acquire Humana;
- The Amazon, JPMorgan, and Berkshire Hathaway venture that aims to transform its employees’ healthcare; and most recently,
- Amazon’s billion-dollar acquisition of online pharmacy PillPack.
Other companies disrupting healthcare include big retail pharmacy chains such as Walgreens and CVS Caremark Corp., which are combining their thousands of stores and walk-in clinics with their e-commerce systems to create new digital healthcare delivery platforms, says Kim A. Buckey, vice president, Client Services, DirectPath, LLC, which helps employees become better healthcare consumers. For example, Walgreens partnered with MDLive in 2015 to facilitate telemedicine offerings to consumers.
Health-specific retailers that have entered the space, such as FSAStore.com and healthwarehouse.com, offer price transparency and product delivery to consumers who are price-sensitive, Buckey says.
Another notable entrant is large employers that are working alongside or acquiring emerging health and wellness companies, Buckey says. UnderArmour, for instance, has invested heavily in wearable devices and, with the acquisition of companies such as MapMyFitness and MyFitnessPal, has become the major player in digital fitness. Under the umbrella of its Connected Fitness segment, UnderArmour has access to tremendous amounts of health data.
Traditional technology entities are building healthcare apps, wearables, and other connected devices, and consumers are using them to track their health progress and feed data back to their provider, payer, or both, says Friend. “Technology has brought healthcare to consumers’ fingertips, putting them at the nucleus of care and blurring the definition of a healthcare organization.”
Retailers are partnering with pharmacies, to share data and reach more consumers, he adds. Insurers are partnering with pharmaceutical manufacturers to leverage patient data to improve outcomes and lower health costs. “Everyone is getting into everyone’s business and will continue to do so to provide improved patient outcomes and ensure survival in a consumer-centric industry.”
The most valuable resource in healthcare is data, which online retailers—with their growing consumer health and wellness products—have in spades, says Friend. “Access to data and the ability to capitalize on that data is key to developing consumer-centric models of care, improving patient outcomes, and lowering costs.”
Online retailers like Amazon are entering the healthcare industry on other fronts, Buckey says. For example, they are selling personal health equipment such as walkers and canes directly to consumers and medical supplies such as gloves and syringes to providers. “Because of their experience negotiating low prices, ability to deliver products directly to consumers on a timely basis, and its built-in price transparency, they are well-positioned to disrupt the healthcare delivery landscape in particular,” Buckey says. For example, online retailers give consumers the opportunity to order medications or supplies online and have them delivered to their home or arrange for pickup at a local store.
“We’ve already seen a shift away from brick-and-mortar stores in other sectors; it was only a matter of time before we saw something similar with healthcare,” Buckey says. “Healthcare services and supplies are just as much a commodity as electronics, clothing, or even cars. With more purchasing power leaning toward consumers, it’s no surprise to see them opting for more convenient options when shopping for the healthcare treatments, services, and products they need.”