After Amazon, Berkshire Hathaway and JP Morgan Chase announced they are building an independent healthcare company for their US employees and Roche announced they bought Flatiron, an oncology data company that captures data from hospitals and health centers on how drugs impact patients’ cancer treatment, few can argue that healthcare as we know it is being disrupted. Add on Uber’s launch of a service to take people to/from their healthcare appointments, CVS Health acquiring Aetna and United Health acquiring DaVita’s primary and urgent care services and the case for disruption is becoming clear. There is a new landscape emerging where both existing and new players are coming together to find new answers to systemic issues.
Two years ago, we launched Healthcare Disrupted which foretold of many of the things we see happening today. Healthcare Disrupted is as relevant today as when we wrote it—in fact probably more so. It provides a strategic guide for life sciences companies to not just navigate these changes, but lead the industry in the creation of entirely new business models that solve today’s systemic issues and deliver better patient and economic outcomes.
Why and how the healthcare industry is changing so rapidly
The collective throw-weight of policy changes, technological advances and structural shifts has primed the healthcare industry for upheaval, disruption and incredible opportunity to advance the standard of care worldwide.
Strategic choices no life sciences company can avoid
To thrive in the emerging healthcare ecosystem, senior leaders will need to: clarify their company’s market positioning regarding patient outcomes and value to the healthcare system; define the differentiating capabilities necessary to deliver on those goals; and create a high-performance enterprise of partners, collaborators and talent.
The question is: How can your company adapt to and help define this new healthcare era?
Four new business models are emerging in pharmaceuticals and medical devices; companies with roots in other industries are crossing into the healthcare market; and entrepreneurs are coming on scene, powered by digital technologies and motivated by the promise of growth, profit and bragging rights for expanding the definition of “care.”
These new business models demand unprecedented collaboration in the field.
Regardless of business model choice, all new healthcare business and operating models must rapidly embrace new technologies that are fundamentally collaborative. Building ecosystems of value-enabling partnerships is a strategic and operating imperative. The catch is that the nature of collaboration in this context breaks new ground for many businesses in the sector.
People will be the biggest advantage for (or the greatest impediment to) a company’s ability to excel in a quickly evolving industry. But recruiting the right mix of new skills and mindsets—and managing performance—won’t be easy in this context. The success of any company’s journey to become value-centric rests on its ability to align employee mindsets, norms, behaviors and empathies to the patient, while compelling them to persistently drive value for the health system overall.
We are at the confluence of enormous change and the emergence of new business models that will disrupt the legacy healthcare institutions, companies and leaders of the last decades. It will take courage to reshape responsibly. But we have a chance to shape the future, rather than be shaped by it. Some of this shaping is for policy makers and governments to create rules of engagement that allow alternative approaches to emerge and innovations to flourish.