A Health & Life Sciences Rx for Thriving Amid Industry Disruption
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To thrive in the converging health and life sciences ecosystem, follow the blurred lines.
Only by collaborating can the entire puzzle be pieced together. By coming together and sharing information across traditional boundaries, health and life sciences organizations can deliver better outcomes, better treatments and better value for consumers—all while driving their own sustained growth and strong operational performance.
The Amazon, Berkshire Hathaway and JPMorgan healthcare initiative and the announced deals between CVS and Aetna, Walgreens and AmerisourceBergen, and Walmart and Humana are some of the most notable convergences that have blurred traditional lines.
But as the infiltration of technology continues to blend the definition of health and life sciences organizations and the economics of care continue to change, centering more on value-based versus fee-for-service care, “we expect these types of mergers to continue at a clipping pace,” as BDO’s Dr. David Friend
told Managed Healthcare Executive
. “We are going to need new names for these health systems.”
Most healthcare leaders (81 percent) expect innovative mergers to continue disrupting the industry in the next three years, according to BDO data
. Forty-two percent and 27 percent, respectively, expect Amazon and Google specifically to have significant impact on the healthcare industry.
“Consumers are now used to the one-click solution provided by companies like Amazon,” Friend said, “which have the potential to make the healthcare experience not only more convenient and user-friendly, but also more effective and less costly.”
In this environment of change, both health and life sciences organizations share the responsibilities of improving quality of patient outcomes, bringing down care costs and collaborating across—and outside—their supply chains.
But when it comes to aligning with consumer expectations to do that, there’s a disconnect. While 74 percent of patients are interested in drug pricing that’s based on outcomes versus quantity of services provided, just 11 percent of organizations say they’re currently working with drug manufacturers to track outcomes.
So even as consumers share their health data with the goal of receiving more personalized care—according to their genetics and environment—most organizations aren’t yet able to capitalize on that data in a way that improves outcomes.
HOW CAN THEY CATCH UP TO THRIVE?
Health and life sciences organizations must strive for Shared Care, Shared Value
: breaking down silos to drive value across the health and life sciences ecosystem. To do that, they must understand, maximize and then reimagine their organizational DNA just as patients are doing so with their own genetics. They’ll need to reach beyond their four walls to share data and other resources that can lead to more effective population health management strategies and better consumer outcomes.
Shared Care, Shared Value Life Stages Checklist
Follow this checklist to work towards improved patient outcomes and sustained organizational growth
Capitalize on Data
LIFE STAGE 1:
UNDERSTAND YOUR DNA
- What parts of your organizational DNA—assets, including data, financial information, IP and talent—make you unique?
- Do you know where all of your unique DNA lives within your organization?
- Do you have information governance in place to properly reflect the state of your business and ensure compliance with local, state and international industry regulations, and help codify what organizational DNA is most valuable to you and your patients?
- Is your organizational DNA accurately depicted in your data, or are valuable details missing?Where do you have blind spots?
- Do you have the proper controls and policies, like strong employee access policies, awareness training and data loss prevention tools, in place to protect your unique DNA?
- Have you digitized your organization to ensure all analog information and processes have been converted into a digital format?
- Have you removed IT complexities, risks and barriers to innovation so you can meet evolving business demands?
- How will your products or services change clinical practice and what is the unmet medical need you are addressing?
LIFE STAGE 2:
OPTIMIZE YOUR DNA
- Do you have a contract management system in place that produces actionable data and empowers meaningful business decisions?
- Are there certain assets you need to divest or deleverage to free up capital and allow you to focus on ones that are more valuable to your patients and profitable to you?
- Do you have an accurate depiction of your total tax liability? Are you up-to- date on evolving tax regulations that could impact your tax strategy?
- Are you maximizing R&D credits and other outside funding sources? Have you implemented processes to ensure data integrity?
- Have you overhauled your revenue recognition systems to mitigate ASC 606 risk and unlock new value?
- Have you educated your workforce on the importance of proper care documentation that’s unique to each patient?
- How are you estimating the likelihood of success for projects in your portfolio?
- Are you conducting continuous financial and clinical due diligence and updating those processes regularly to account for evolving risk factors?
- Are you updating, and conducting regular stress tests of, your protections around cyber, data privacy and IP?
- Do you have processes, controls and scenario planning in place to mitigate risk around HIPAA, cybersecurity, the Foreign Corrupt Practices Act, the False Claims Act and others?
- Are you anticipating new, unimagined risks that could be coming down the pike, including new regulations or economic and political instability, and creating risk mitigation plans for each scenario?
- Have you taken the necessary steps to enhance opportunities and reduce threats (i.e regulatory and compliance issues) in order to meet project objectives?
Transform to Compete
LIFE STAGE 3:
REIMAGINE YOUR DNA
Innovate Patient Care
- Are you missing out on outside sources of capital, and if so, is now the time to consider a capital partnership?
- Have you looked into reducing manual effort on repetitive tasks with the engagement of robotic and cognitive technologies that can improve timelines and accuracy?
- Do you have the resources and policies in place to recruit and retain top talent, including professionals from outside the traditional health and life sciences ecosystem?
- Should you consider and plan for M&A activity or an IPO, and what are the risks that come along with those?
- Do you have a sufficient change management strategy, and supporting processes to make it successful, in place?
- Do you have a digital transformation strategy to reimagine your business and operations for the future digital economy?
- Do you have the data analytics and population health management strategies in place to understand and act upon your unique patient populations?
- Should you consider and plan for non-traditional partnerships and information- sharing across companies, industries and even borders?
- Are you maximizing digital health R&D, including artificial intelligence, automation, virtual reality, telemedicine, genomics and medtech?
- Have you adopted a digital R&D strategy to maximize patient engagement, safeguard patient profiles, and help boost predictions to accelerate more successful clinical trials?
The clock is ticking to begin the life stages that will take you to Shared Care, Shared Value.
The aging population—the biggest piece of the puzzle when it comes to lowering collective healthcare spending and unlocking shared value—is expected to make up more than 20 percent of the population by 2029. And amid government pressure to lower healthcare spending, seniors themselves are demanding their last years be measured by quality of life and autonomy rather than number of days left at the hospital.
In response, healthcare organizations we surveyed are already planning to focus most of their investments in home health (44 percent) by 2020. They’re looking to technology—and the data it provides—to help them provide care more rooted in empathy and centered around the home.
Even if your organization doesn’t directly care for seniors right now, as the country’s aging population grows, the entire health and life sciences ecosystem will be challenged to meet their needs. And as value-based contracting and innovative partnerships gain popularity, senior care providers will look for partners on the continuum who can help them improve those patient outcomes and unlock new, shared value.
For organizations that have yet to begin transforming their businesses to meet these changing demands, it’s time to catch up or face extinction.
Whether you’re a small, mid-market or large organization in the health and life sciences ecosystem, we’re ready to create a Shared Care, Shared Value roadmap personalized to your organization’s unique DNA.