Telemedicine, Mobility and Cloud Computing, Big Data Analytics, Virtual Reality (VR), Wearables and IoT and Artificial Intelligence (AI) are 6 key drivers transforming the healthcare industry
We live in truly disruptive times. In our hyper connected world, mobility is the key differentiator for customers. 52% of web browsing happens on mobile devices, and recent statistics show 77% of customers in first world countries book medical appointments online. The use of wearables in daily exercise regimes provide consumers with real-time health data that gives them a feeling of being empowered to take care of their health. Customers are demanding on-demand healthcare and companies like Nomad Health link doctors with hospitals/medical facilities on a need basis to provide their expertise suited to a typical on-demand consultation.
US spent a whopping 3.2 trillion USD on healthcare in 2015 (about 18% of the country’s GDP). Experts feel digital transformation of healthcare can save about 300 billion USD each year particularly in the area of chronic diseases. Healthcare providers and participants need to embrace digital disruption to meet these diverse customer needs. To enable the healthcare industry to transform, we identify the key transformation drivers driving disruption in the next section.
Key Transformation Trends in Healthcare
There are 6 key drivers of transformation in the healthcare industry:
1) Telemedicine – Especially in poorer nations with limited spread of healthcare access and connectivity issues, Telemedicine can be a huge transformation agent both for patients and doctors. It has benefits of saving costs (no travel required) and time (consultations can be managed remotely). Telepresence in the mental health space has also been a huge boost where customers sometimes prefer privacy.
2) Mobility and Cloud Computing – Healthcare industry is slowly moving to an electronic health record model with lesser files and paper bills. Hospitals, clinics, insurance providers are saving patient medical records in the Cloud with patients able to access test results and health records 24*7. The proliferation of mobile devices enables both medical practitioners as well as patients to access information and search data through mobile devices.
3) Big Data Analytics – Big Data is transforming decision-making in healthcare by providing a plethora of aggregated data sets from social media, financial transactions, health records, etc. to derive patterns and unique insights. The key benefits from Big Data Analytics include lower rate of medication errors, demand driven staffing. Pharma companies are analyzing market data to derive product iteration and product budgets. Machine Learning algorithms can analyze patterns and identify risk factors and recommend preventive treatment.
4) Virtual Reality (VR) – Doctors use VR simulations to enhance skills or plan complex surgeries. VR technology is being used for pain treatment, anxiety as well as post-traumatic stress disorder. The global virtual and augmented reality in healthcare is expected to touch USD 5.1 billion by 2025.
5) Wearables and IoT – Wearables like heart rate sensors, oximeters (measures amount of oxygen carried in the blood), exercise trackers have transformed the way customers are engaged about their own health parameters. Customers can also share their data sets with health professionals for timely advice on possible health interventions steps.
6) Artificial Intelligence (AI) – AI is being leveraged in key areas like medical imaging, drug discovery and genomics. AI provides pattern recognition which provides patients with personalized therapies based on genetics and lifestyle habits. Pharma companies are using machine learning algorithms to shorten the drug development lifecycle.
Let’s do a quick review of how these transformative technologies are providing value across the healthcare value chain show in the figure above:
- Payers – Healthcare value chains vary between countries, in some instances government is the payer as in the case of National Heath Service (NHS) in UK or in countries like India, the private health systems are more developed and payers tend to be individuals or employers. Digital transformation enables payers (individuals) to have on-demand healthcare, health data from wearables that can drive positive health outcomes. Governments and employers to perform Spend Analytics on the cost of insurance data by diseases or treatment types.
- Intermediaries – Next in the value chain are the intermediaries like insurance providers and 3rd party administrators. Intermediaries pay the insurance claims for treatments provided to the individuals by the providers. Intermediaries can leverage digital technologies like Big Data Analytics and Machine learning to derive insights around Claims, Health Trends (Claims by demographic group, age, income trends, geographic location) and perform Fraud Analytics to derive the propensity of fraud as well as detect potential fraudulent transactions.
- Providers – Providers like hospitals, clinics are providers of medical diagnostic and treatment services to individuals. Providers are now leveraging the digital technologies to provide valuable services like on-demand healthcare, Electronic Health Records (EHRs) that provide the complete medical history of patients thereby enabling better preventive care and reducing healthcare costs from unnecessary medical tests. On-demand healthcare provides flexibility to individuals and ability to provide remote patients telemedicine is a great differentiator. Providers can also leverage Big Data Analytics to provide insights about staff utilization, supply chain optimization, health trends, etc.
- Bulk Purchasers – Bulk purchasers procure drugs and devices in bulk from producers and supply to the providers like hospitals and clinics. Bulk purchases need to constantly monitor the efficiency of their order fulfillment and are leveraging Big Data Analytics to manage inventory and perform sales analytics to understand fast moving items and demand trends.
- Producers – Producers are drug companies that design, manufacture and market drugs or medical device manufacturing companies. Drug companies have been leveraging Big Data Analytics and Cloud to analyze data from diverse data sets to measure drug sales (sales analytics) and spends (spends analytics) to help plan better outcomes. Device manufacturing companies perform sales analytics to find the market demand which helps optimize the production plans to meet market demands for devices.
As is evident from the transformational impact of digital technologies at each stage of the healthcare value chain, companies are increasingly looking at leveraging these technologies not only for productivity enhancements, cost optimization but also to meet requirements of the customers. The key benefits that digital transformation has provided the healthcare industry can be summarized as:
- Cost Optimization – Optimizing costs by mobility solutions (providing access to EHRs, ability to book online appointments), big data solutions to measure effectiveness of supply chain, spends analytics, inventory management, claims analytics as well as proactively manage fraudulent claims. Telemedicine provides huge cost saving potential (no travel cost for doctors or patients as well as saving time of travel).
- Customer Needs – New age customers demand access to EHRs, on-demand healthcare as well as telemedicine facilities to increase access to healthcare services, especially in remote regions. Wearables enable customers to monitor health parameters in real-time as well as get expert guidance using on-demand healthcare systems.
- Productivity – Telemedicine provides productivity benefits by saving travel time for doctors. Mobility and automation solutions enhance productivity of healthcare providers as well as payers. On-demand healthcare enhances productivity by increasing the availability of doctors based on demand for certain medical services. Use of robots in Japan to perform routine tasks like fetching items provides productivity benefits.
- Compliance – Healthcare is a moderated industry worldwide with numerous compliance requirements which are country-specific. Some countries like Finland have a need for health data archived records to be stored within the country. Cloud solutions provide mechanisms to manage such compliance needs.
- Revenue Models and Pricing – The use of wearable data by insurance companies to understand health parameters and lifestyle habits are creating opportunities to create customized products as well as enabling companies to charge prices based on health parameters and lifestyle.
Healthcare and pharma companies are also exploring the potential of Blockchain in transforming the way EHRs are managed. A recent report suggests that the Blockchain market in healthcare could grow to USD 890 million by 2023.
The author is Data Platform Solutions Lead at the Services Integration Hub in IBM and has written three books