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September 06, 2016
New health digitals redefine “healthcare” as a service
By: Anne O'Riordan and Jeff Elton Ph.D.

In the life sciences industry there’s currently a shift in focus from volume to value. Along with this shift, four new business models are emerging: lean innovators, around-the-patient innovators, value innovators and new health digitals. In today’s post we’ll look at New Health Digitals.

Companies using this model are enabling increasing numbers of patients to take control of their health, as they redefine what we mean by “healthcare” as a service. Deploying technologies, infrastructure and developer networks to health, wellness and care management, they are putting digitally powered initiatives at the center of their strategies or entering the healthcare market as they see opportunities to bring digital solutions to bear on gaps in the system—whether for patients, providers, payers, life science companies or other health-related businesses.

What is the New Health Digitals business model?
New Health Digitals fall into three main categories:

  1. Digital Gone Healthcare. These companies are consumer and infrastructure-focused technology firms—including Google, Apple and Qualcomm—that are now placing a major focus on healthcare services. These firms leverage technology to become more intimate with patients and their conditions.

  2. Healthcare Gone Digital. These companies are healthcare-centric firms—including Philips Medical and GE Medical—that are now digitally-enabled and savvy, seeking to disrupt themselves and others with new strategies and mandates.

  3. Start-up Digitals. These companies are start-up organizations, seeing gaps in the market and racing to fill them before others step in.

Regardless of their category, these firms combine traditional elements, such as data from electronic medical records, with new sources of insight, such as personal monitoring devices and social tools, to help patients take control of their health.

Differentiating factors
The New Health Digitals, with the exception of start-ups, have the most significant presence in global markets of any of the models. Whereas Lean Innovators are relentless cost managers looking for innovative therapeutic arbitrage opportunities, Around-the-Patient Innovators look to ensure value in their therapeutics, and Value Innovators drive value through new integrated services, New Health Digitals compete through ubiquity:

  • Their devices are in every pocket or purse.

  • Their operating platforms have a global scale and transcend sectors and uses.

  • Their services support basic intra-family and intra-organization communications.

Companies embracing this model provide digital infrastructure to whole cities, are deeply technical and scientific, and have a history of, and expectation for, disruption. They have an unusual vantage point—rather than producing the end solutions, they bring together all the enabling technologies, tools and infrastructure, and allow others to compete in the picture.

Implications now, soon and later
No sector of our economy will remain the same after the forces of digital disruption converge and the capabilities of the New Health Digitals are brought to bear on the industry.

We are already seeing the New Health Digitals’ strategies branching in different directions. The Digital Gone Healthcare businesses have a set of operating economics that assume enormous scale—50 percent of a country, hundreds of millions of customers and petabytes of data. They come from a focus on the patient as a consumer, and they believe in the empowerment and protection of that consumer—giving the patient the power, authority and confidence of an expert.

In contrast, the Healthcare Gone Digital businesses have brought with them infrastructure and costs from their legacy operations within hospitals and ambulatory clinical care facilities. They are extending out to remote settings and integrating across the continuum. Still, their costs are “healthcare” in their origins, and centered on expertise and precision. They focus on the care providers and clinicians—and bring the experts to the patients.

Start-ups, smaller and more agile, look for specific niches—geographic areas, certain disease- or condition-specific markets—and create value for caregivers and patients, sometimes skirting traditional reimbursement paths in favor of more straightforward “retail” transactions.

These three types of organizations under the New Health Digitals umbrella are converging on and disrupting healthcare from all angles. We can describe what they are doing and envision the implications, but their ultimate potential may very well be beyond what we can currently fathom.

To learn more about these four models, view the infographic or download an excerpt from the book.

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