Diving into Profit in Digital Health

LATEST THINKING

Accenture’s research suggests that digital health funding will hit $6.5B by 2017¹, and that Corporate America made $3B in healthcare-related corporate venture capital investments in 2015.²

However, companies are struggling to identify sources of profit across digital markets or segments.

The question many corporate management circles are aiming to answer: Along which segments of future value should organizations position themselves to realize maximum sustainable value creation?

The answer: Uniquely packaged experiential services that deliver meaningful outcomes across an already-here digital value chain.

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^[1] Accenture; "Following The Money In Digital Disruption"

^[2] Accenture; "Healthcare's Digital Lifeline"

KEY FINDINGS

Accenture Strategy experience and analysis suggest that a new value chain is emerging, revealing a formula for future success.

The value chain illustrates how digital health companies are orienting around four segments:

1.	Sense – Sensors and connected devices that acquire diverse data sets.
2.	Aggregate – Near-continuous collection and curation of data to enable insight.

3.	Analyze – Retrospective and prescriptive insight that allows for informed action.
4.	Serve – Protocol-driven action that realizes known outcomes.

Today, value is concentrated in Sense and Aggregate, developed markets which comprise approximately 70 percent of the digital health profit pool. In the future, Sense and Aggregate companies will struggle to realize sustainable growth in profits as profit pools migrate toward service offerings.

Accenture predicts that service-oriented and experience-led companies will capture a dramatically larger percentage of the profit pool. By 2020, Serve and Analyze profit pools will grow 10x and 3x more than the rest of the value chain, respectively.

RECOMMENDATIONS

Amidst competing programs, future resource investment in digital health must be focused on the following priorities:

Define dimensions

Be self-aware and understand your current place along the value chain. Assess opportunities to move laterally across the digital value chain.

Test the waters

Prepare for value migration by rapidly piloting and prototyping new solutions in high-potential Serve segments.

Widen your reach

Build, buy or partner to gain the capabilities needed to create an end-to-end digital value chain offering. Become a destination camp for collaboration.

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