Unleashing innovative, competitive new companies
This article is Trend No. 3 of 5 in Drug Store News' overview of the current state of the healthcare market.
Like the regulatory changes that spawned the modern era of telecommunications in the mid-1990s, the health reform law has unleashed a tide of innovation and competitive disruption that’s rippling through the nation’s shifting healthcare system. More than 90 new companies have emerged since 2010 “to meet the demand for lower-cost, consumer-oriented care options in the post-ACA era,” PwC’s Health Research Institute noted in its new report on U.S. health trends in the wake of the Affordable Care Act’s implementation. Those firms, many of them specializing in data analysis, e-communications and mobile technology, are the first wave of what HRI called “innovators in the new health economy,” spawned by a fast-reforming health system and that system’s urgent pursuit of more collaborative and cost-effective ways to help Americans stay healthy or better manage their disease.
PwC likened this post-ACA stampede to the impact created by enactment of the Telecommunications Act of 1996. That change in regulation opened up communications bandwidths and “spawned intense competition,” the HRI report noted, as “new investments in telecom topped $1 trillion” and newcomers like Global Crossing and McLeodUSA emerged to challenge established giants like AT&T.
“A similar trend has emerged two decades later with the ACA, which has set the stage for phenomenal growth from new entrants,” HRI said. The health reform law is drawing “millions more paying customers into the market, promoting transparency, loosening technology regulations and driving changes in how care is delivered and paid for,” the HRI report noted, spurring “savvy investors and startup firms to enter the rapidly expanding $2.9 trillion [healthcare] industry.”
This new health economy also is luring such established technology giants as Apple and Samsung into the market with “products and services aimed at improving transparency, wellness and quality … in the form of mobile apps, data analytics and do-it-yourself devices,” HRI reported.
Many of these product and service advancements are turning up in the retail pharmacy space. Among the more than 90 new firms serving the post-ACA health system, for instance, are 29 companies offering telehealth solutions that connect patients with clinicians, doctors, pharmacists and other health providers, according to HRI. Another 15 new firms provide consumer education to inform health-related decision-making. Dozens of other innovator firms are providing data analytics, interactive software to improve dialog between patients and providers, clinical services, communications technology, new insurance services that offer individual wellness incentives and other services.
“New health players seek to deliver the same convenience and do-it-yourself flexibility that consumers demand when banking online or booking travel,” HRI reported. “As new entrants continue to shape consumer expectations, traditional providers will need to keep pace, offering flexible hours and exploring telehealth options. Expect the emergence of new technologies to enhance these remote interactions.”
In this new and emerging health economy, “new entrants” also can include “established providers” that “are now branching out,” the report noted. These trusted brand providers are striking “the right balance between innovation and loyalty, resulting in market disruption.”
“Early adopter MedStar, for example, has partnered with CVS’ MinuteClinic to improve coordination across the care continuum,” HRI reported. “Patients can take advantage of the convenience of retail clinical services with the comfort of knowing that information will be shared between CVS’ clinicians and their MedStar physician.” In addition, HRI said, “Walgreens is teaming with both startup Theranos and telehealth leader MDLive, giving customers access to convenient, affordable care, such as lab tests, while they shop.”
“With an eye toward improved patient monitoring, medication adherence and cost control, these partnerships offer an opportunity for greater coordination along the continuum of care,” the report noted. “Rather than trying to do it all, health businesses should hone in on their core operations and use outside expertise to fill in the gaps.”
The new era of innovation also is “igniting partnerships among industry incumbents,” HRI noted. “Aetna, for example, has teamed up with Inova to create Innovation Health, pairing two historically unlikely candidates in the pursuit of a consumer-centric, tech-supported business model for the 21st century.”