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With proliferation of technology and ACA value-based pricing rules, healthcare will continue to decentralize with a focus on outcomes
Confidential – Do not copy or distribute (www.innoaction.co)
From: Traditional Model To: Connected Health Model
Provider perception of product value
Payers reimburse indiscernibly
Patients consumes passively
Cu
rre
nt
Fu
ture
Access based on evidence of safety & effectiveness
Provider has little influence
Value shift lowers margins
Unrestricted access
‘Simple’ provider influence model
Predictable profit margins Instrumentation and
measurement
Patient accountability
Tiered healthcare supply and demand model
Standards of care
Info
rmation a
nd o
utc
om
es
tra
nspare
ncy
• Information transparency from real world evidence will challenge access, safety, and reimbursement,
driving up the bar for safety and efficacy and driving down margins of current business models
• Value shift away from products to solutions, to identify the right solution for the right patient to deliver
the right outcome – e.g., diagnostics, monitoring, medicine, lifestyle, incentives, etc.
Source: InnoAction Advisory
Protocolization of care combined with higher patient engagement will further put the consumer in charge of their health
• Standards of care and protocolization of care through consumer/ home diagnostics and differential
diagnoses tools can enable more evidence-based, coordinated, and value-driven healthcare
Source: Bain
Confidential – Do not copy or distribute (www.innoaction.co)
The advent of mobile, sensor, and wearable tech has opened up a huge potential for consumer-driven healthcare
Source: IBM
Confidential – Do not copy or distribute (www.innoaction.co)
Virtual, digitized, and evidence-based care has the potential to drastically reduce healthcare costs, while improving quality
Source: InnoAction Advisory
Quality
Co
st
Ev
ide
nc
e
Low High
Low
Low
Hig
h
Physician Office
Hospital
Home Health
Telemedicine
Coordinated Care
EV
IDE
NC
EIN
FO
RM
AT
ION
HE
UR
IST
ICS
Digitized Health
Confidential – Do not copy or distribute (www.innoaction.co)
Virtual, digitized, and evidence-based care has the potential to drastically reduce healthcare costs, while improving quality
Source: Oliver Wyman
Confidential – Do not copy or distribute (www.innoaction.co)
Healthcare companies who can own and coordinate this emerging technology and evidence domain can shift the economics of care
Source: IBM
Confidential – Do not copy or distribute (www.innoaction.co)
Technology advancements combined with significant cost pressures and shifting consumer norms will drive business model shifts
Evolving Challenges for Incumbent Business Models
Enterprise
boundary
Customer
interaction
From:
Complete and proprietary in-house capabilities from research to post-marketing
Push marketing oriented to drive transactions
Through new product development by translating science into clinic
Portfolio diversification, scale and market share
Value creation
Risk
management
To:
Eco-system of collaborative networks to cost-effectively enable value chain
Co-value creation oriented to fulfill customer needs
Through solution development using a systems design approach
Risk-sharing by orchestrating solution partners and stakeholders
• Open platforms enabled by technology will shift the supply-side models for R&D, Manufacturing/
Supply Chain, Commercial and Medical – creating lower fixed infrastructure costs and displacing
existing barriers to entry i.e. enabling new-entrants to disrupt existing business models
Source: InnoAction Advisory
Confidential – Do not copy or distribute (www.innoaction.co)
Key trends in consumer-centered healthcare
Source: PSFK 2014
Confidential – Do not copy or distribute (www.innoaction.co)
Key trends in evidence-based medicine
Source: PSFK 2014
Confidential – Do not copy or distribute (www.innoaction.co)
Commodity diagnostics will shift from a centralized model to a patient-centered decentralized model (I)
Source: PSFK 2014
Confidential – Do not copy or distribute (www.innoaction.co)
Commodity diagnostics will shift from a centralized model to a patient-centered decentralized model (II)
Source: PSFK 2014
Confidential – Do not copy or distribute (www.innoaction.co)
Commodity diagnostics will shift from a centralized model to a patient-centered decentralized model (III)
Source: PSFK 2014
Confidential – Do not copy or distribute (www.innoaction.co)
Commodity diagnostics will shift from a centralized model to a patient-centered decentralized model (IV)
Source: PSFK 2014
Confidential – Do not copy or distribute (www.innoaction.co)
Commodity diagnostics will shift from a centralized model to a patient-centered decentralized model (V)
Source: PSFK 2014
Confidential – Do not copy or distribute (www.innoaction.co)
Commodity diagnostics will shift from a centralized model to a patient-centered decentralized model (VI)
Source: PSFK 2014
Confidential – Do not copy or distribute (www.innoaction.co)
Commodity diagnostics will shift from a centralized model to a patient-centered decentralized model (VII)
Source: PSFK 2014
Confidential – Do not copy or distribute (www.innoaction.co)
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