By Reenita Das
Partner and Senior Vice President
Healthcare and Life Sciences
Frost & Sullivan
As the healthcare industry is transforming and becoming more consumer driven, the “5 Ps” are becoming the hub of the industry: prevention, personalization, prediction, preemption and personal responsibility. As a result, there is a rush of new stakeholders who are entering the game and changing many of the rules. Who are these new breed of companies and what are they bringing to this industry? How are they transforming the way healthcare is practiced?
Social Media, IT Co.’s & Telecom: Shifting the Balance of Power
The foundation driving change in regard to how providers and patients interact and how medicine is practiced is "information technology." We have witnessed a whole generation of content providers and social media companies – from Google, Facebook and Twitter, to Web MD and zillions more – that are playing the role of democratizing this data and taking it a step further by building consumer participation and responsibility into the mix.
Healthcare is a largely untapped market for specialized telecommunications systems with a strong immediate potential; therefore, it presents a handsome alternative revenue stream for this group. Telecommunication companies – or “telecoms” – are striving to customize their traditional offerings to meet the unique requirements and regulatory standards of the healthcare industry. These range from providing connectivity for enterprise mobility, asset management and exchange of health data in various formats; platforms for healthcare IT tools; mobile apps for physicians and healthcare professionals; all the way to patient engagement solutions. At a more consumer level, the telecommunications industry is targeting the increasingly health-conscious consumer with mobile apps that support education, health and wellness, patient monitoring as well as mobile communication. On a larger scale, telecoms will eventually look toward creating a connected community or a smart city of which healthcare will be one component.
We are also waiting with bated breath to see if media companies will seriously enter this space for the long haul. Time Warner Cable recently announced the “Virtual Visit” program, implemented via Cleveland Clinic's Center for Connected Care, whereby patients will be able to interact with their doctors via an encrypted two-way video without leaving their home. This product will be offered as a bundled service consisting of connectivity installation, customer premises equipment (modems and video conferencing equipment), and technical support in patients’ homes. There are other cable companies in addition to Time Warner Cable that are entering this space such as Cox Communications and Comcast who are doing similar pilots and seeking additional revenue streams from healthcare. War has already begun with AT&T’s recent announcement to acquire DirecTV, leading to more consolidation among internet and TV providers. Should we now expect Google who, recently, has been making moves to acquire gaming companies, to gear toward healthcare tech companies? Google has been trying to reinvent themselves and move outwards laterally for a while now.
Digitization of Health Draws Sensor/RFID Co.’s & Consumer Electronics into the Foreground
As healthcare moves toward a model of constant monitoring and feedback based on “on-demand, anytime, anywhere” concepts, sensor technology will drive the revolution of mobile health to the next frontier as it becomes more available, visible and usable to people everywhere. Readings from sensors can be used in many facets of healthcare and disease prevention. Apart from regular monitoring, we can use sensors to track the emergence of disease, detect exposure to harmful environmental elements, or even predict the likelihood of developing health problems based on patient medical records, family health history and public health data.
Nokia held a competition in 2013 and again in 2014 called the Nokia Sensing XCHALLENGE. It is a $2.25 million global competition to accelerate the availability of hardware sensors and software sensing technology that individuals use to access, understand and improve their health and well-being. The 2013 winner was Nanobiosym Health RADAR with its device that enables diagnostic testing in the palm of your hand. A drop of blood or saliva is placed on a nanochip and inserted into a mobile device. The user selects a particular disease strain from the software interface and then pushes the start button to begin. The device detects the presence (or absence) of that disease's pathogen in real-time with gold standard accuracy. These mobile diagnostic technologies are taking the laboratory to the patient – quite the reverse of where diagnostic testing has been so far. The tremendous advances in health sensing are truly game changing and will transform how doctors interact with their patients to address and solve health challenges. More importantly, it puts patients at the center of the care process and provides personalization.
As the line between health and fitness devices is blurring, every consumer electronics company – from LG to Samsung to Sony – is getting into the game. Thus begins a whole generation of wellness app companies that are now moving from the regular "step counting" outfits to more sophisticated platforms that includes building connectivity across all the stakeholders and connected to the cloud. Apple’s newest foray into setting up a medical technology division and focusing on building a healthcare playbook, as well as its recent discussions with FDA, shows how serious they are about the healthcare space. However, on the acquisition front, Apple is definitely a slow mover, more resistant and less aggressive than Google, so it will be interesting to watch their technology acquisition strategy in regards to healthcare.
Direct-to-Consumer Testing Brings a Potpourri of Others
I believe the age of "direct-to-consumer testing" has already begun with devices such as the electrocardiogram monitor that can be carried in your pocket or the ability to take a hearing aid or eye test at home. This has heralded the advent of retail grocery and drug stores offering a “one stop shop” for diagnostic testing, monitoring and coaching. Global giants like the Walmarts and Walgreens of the world are clamoring to take control of the consumer as quickly as possible and provide a full service solution that can be personalized on demand. These consumer-facing testing devices are becoming the gateway to personalized medicine as they can aggregate data in a continuous contextual fashion. It then can be connected through the cloud to a supercomputer like IBM’s Watson to provide insights into not just your health but also your personal potential. In the future, we will have personal avatars that will help us reach our potential by way of coaching and motivation.
The Supply Chain is Growing More Complex
Outside of the coterie of healthcare products and service-type companies, we are also witnessing a complex supply chain emerging regarding logistics companies building their muscle and strategy for healthcare. Many of these companies like FedEx and DHL Express are already partnering with healthcare providers along the continuum of care and looking at extending their service offering beyond just distribution and logistics to build more value, consolidate cost and increase outcomes to this large diverse audience group. This implies these new entrants could start controlling more of the chain and eventually start competing with traditional pharmaceutical and medical device companies.
What do Healthcare and Hospitality Have in Common?
On a last note - healthcare and hospitality have much in common. For one, both have the same etymology. The word “hospital” comes from the Latin word “hospes,” or host, which is the root for English words such as “hotel,” “hostel” and “hospitality.” Imagine if we are treated as a guest in hospitals compared to being treated as patients. What implications does this have for healthcare providers? What does "guest-focused care" really mean?
In fact, as healthcare is becoming a consumer service industry, there are many lessons that healthcare can learn from the hospitality industry. In the future, it is expected that the hospitality industry will extend beyond recreation, leisure and wellness to healthcare services providing an end-to-end customer experience. The irony is we are already witnessing some of this by way of medical tourism. I expect this will be a natural transition for the hotel chains of the world to enter into healthcare soon enough. Alternatively, it may be time for healthcare suppliers to push themselves out of their comfort zone and look at partners outside their traditional ecosystem rather than waiting for more intruders to attack.
For more, view Frost & Sullivan's infographic about the changing healthcare environment.