For an industry which is often slated as one of the most conservative and least open to major technological innovations– the healthcare sector has witnessed some major breakthroughs and opportunities in 2017. As we approach the end of the year, it is interesting to analyze how the healthcare industry has turned into a prime space for investors from various business verticals.
Top 5 Trends that added vibrancy to the healthcare industry in 2017
1) Personalization of care
More than ever, this year saw an increased focus on personalization of care. Access to data and modern mobility have altered the medical care service process. Personalization has allowed today’s patients and caretakers to easily compare costs involved in a particular health service, and decide which doctor and hospital to visit accordingly. Healthcare organizations on their part have come up with packages geared towards placing the patient experience at the center of care. For example, the Geisinger Health System experimented with a money-back guarantee for patients, going to the extent of providing satisfactory rebates in an attempt to up their marketing strategy and improve their overall quality of healthcare.
2) Entry of digital health toolkit in behavioral healthcare
In post-care settings and rehabilitation centers, digital health toolkits have emerged as efficient alternatives to the traditional behavioral healthcare methodologies. These toolkits are amazing patient engagement platforms designed to capture minute details of lifestyle and behavioral health of the patients. The data captured by these digital health toolkits enable better diagnosis of patient risk solutions and adds a holistic element to precision medicine.
Digital health toolkits also encourage healthier lifestyles, thereby helping patients avoid excessive treatment costs in the future.
3) Venture capital investment in healthcare
2017 has been the year that witnessed huge investments in the form of venture capital (VC) in the healthcare industry. While there was a time when strict regulatory oversight, and global recession had tightened VC investments, especially in the case of early-stage companies; maturity of medical technologies and policy changes by the FDA have led to a resurgence in healthcare funding.
In 2015 alone, VC firms invested $16 billion in US healthcare companies, and by the year 2020 our market analysts expect the figure to surpass $20 billion. It is not the US health and pharma companies alone which have gained the attention of venture capitalists– rather, emerging economies like China and India have also caught the attention of venture capitalists, bringing us to the conclusion that VC is the new financial model for funding in the healthcare industry across the globe.
4) Better population health management with big data
Our latest reports show how inaccurate data can cost health care organizations billions of dollars. Population health management and big data analytics have gained immense interest of the policy makers and stakeholders in the healthcare industry. Data driven information is critical for making decisions about patient engagement, payment models, and cost optimization.
Another equally important point which has clearly surfaced in the year 2017 is the fact that value-based care and population health management require more than just information from big data. Rather, what is needed is intelligently targeted insights that will improve the overall patient care scenario. With this in mind, medical organizations prefer resources that can identify patient cohorts, classify patients by risk, as well as trim down unnecessary utilization among high-spending patients.
5) The Patient is king in the new healthcare framework
Patient-centric care and better patient engagement have shifted the focus of the healthcare industry from volume to value-based care delivery models. The patient community no longer wants to be just a passive recipient of healthcare services, rather they prefer playing an active role throughout the entire treatment cycle. Technological innovations in the form of health products like wearables, AI, and telehealth, have played a crucial part in bringing a paradigm shift in the healthcare framework.
While these trends have made the healthcare industry a space with immense potential, year 2017 also saw the industry face challenges which dampened the growth trajectory. Three major challenges which stakeholders had to struggle with this year are:
Cost involved in providing even the basic health care facilities is rather high. While the developed economies are working towards increasing the healthcare spend, the picture is rather dismal in low-income countries due to limited government reimbursements. In case of countries which are working on expanding their healthcare access, it is the infrastructure issue which is making it rather difficult for public health care systems to sustain current levels of service and affordability.
Perhaps the best way to overcome this challenge is to reconfigure the economic incentives in such a manner that the patient’s health is afforded the utmost importance, while value-based payment programs and risk-sharing is encouraged and given due recognition.
Coming up with innovative health solutions be it in the form of gadgets, medical services, or payment models is something that stakeholders are struggling to achieve in the healthcare industry. Governments, health plans, providers, and life sciences companies are facing rising costs and inconsistent outcomes in their pursuit of the holy trinity— improving care, improving health, and reducing spending. Any major change in the medical industry can take place only if innovation is encouraged right at the R&D level. But, financing innovative projects and partaking in the associated risks is a major commitment and not every stakeholder’s cup of tea.
C) Regulatory compliance
Being one of the most regulated environments, the primary driver in the healthcare industry is safety. From the investor’s point of view, assessing and regulating the healthcare practitioner’s quality is a complicated process, especially as it differs from country to country. Along with this, complexity in the form of clinical and technological changes and move towards outcome based payment models, have emerged as major bottlenecks for stakeholders in the healthcare sector.
What does 2018 have in store for the healthcare industry?
It is interesting to see how the trends and challenges of 2017 will shape the healthcare industry in 2018. Our industry experts are quite positive about the future of medical care in the forthcoming years, and expect higher investments, better technological innovations, and most of all, a more patient-oriented healthcare system.
2018 might also be a year of major mergers and acquisitions for drug companies. With patents worth $17 billion expiring in the next ten years, it is high time that drug companies strategize on ways in which their losses can be checked without losing out on the emerging markets. Mergers and acquisitions are one of the most effective ways to tackle this situation. Big companies like Pfizer can help accelerate the growth of smaller regional players through tactics like label expansions, marketing, rebranding, production, and distribution efficiencies.
Our research shows that in the next few years the incidence of chronic diseases will rise at an exponential rate. It is for this reason that industry experts expect greater advancement in the treatment of chronic and orphan diseases. Market experts predict huge revenue potential for pharma companies dealing with specialty drugs for chronic diseases.
Lastly, 2018 will also be the year when Asian countries will emerge as a major market for pharma and medical devices. At present, China alone accounts for a quarter of the global healthcare market, and this number is sure to increase. Additionally, health insurance is one of the most untapped and underdeveloped markets in the Asian countries. This situation provides immense possibilities and opportunities for government organizations as well as private players to dive into the medical insurance market.
It is safe to conclude that while 2017 brought its own set of challenges and opportunities to the table, 2018 is sure to be more promising for the healthcare industry across the board. The hard questions will finally be answered and all available opportunities will be exploited in full.