Healthcare reform is bringing major changes to the U.S. healthcare system. Care will be delivered and paid for in new and disruptive ways. Growth opportunities will shift to new segments and value chain components. White space opportunities will become increasingly important. Health plans that anticipate and proactively prepare for the post-reform marketplace will have a strategic advantage over other plans that wait to respond.

Specifically, Oliver Wyman believes health plans' success in a post-reform world hinges on:

• Scenario planning to develop options for how to compete in the post-reform market with consideration for the most viable pathways and key strategic hedge positions
• Strategic realignment across the organization with a focus on the value proposition and competencies that will drive success
• Transition management to bring the organization through a significant transformation while maintaining legal and regulatory compliance, key stakeholder relations, and market share

Specific examples of our healthcare reform work include:

• Created reform strategies for multiple health plans (including local, regional and national) that included: Comprehensive analysis of reform impact on existing business; business segment portfolio analysis, operating profit analysis, and long-term scenario planning; short-term and long-term strategy prioritization for product, pricing, and distribution strategy, as well as for health management imperatives
• Conducted detailed analysis of the impact of reform on membership, risk, and cost summarized in public report for major payer association
• Shaped legislation through our participation in multiple meetings on the Hill with key decision makers and influencers

Oliver Wyman believes that the future of a sustainable healthcare marketplace rests in Integrated Health Management (IHM) — a comprehensive new approach for care management and delivery. This holistic strategy helps companies compete on the basis of cost and quality of care, achieving savings not by rationing care or cutting benefits but by coordinating care, focusing resources correctly, and aligning the interests of payers, patients, and healthcare providers.

Over the past five years, a significant portion of our practice has focused on the development and implementation of IHM models with delivery system and health plan clients. Our experience has been that health management, financing, and delivery models can be redesigned to dramatically improve the cost and quality of care while also improving both the physician and consumer experience. Specifically, Oliver Wyman’s approach is intently focused on bending trend while preserving or enhancing quality, through:

• Innovative programs focused on specific patient populations, clinical conditions, and services
• Game-changing clinical models, based on aligned incentives, and clinical innovation
• Pioneering network-based products that drive critical progress in health engagement and personal accountability

Examples of recent IHM engagements include:

• Designed and implemented an entirely new Clinical Quality and Patient Safety infrastructure for a large multi-market integrated delivery network (IDN). Oliver Wyman helped integrate patient management, improve physician outreach, enhance information flow, and realign hospital governance structures and physician relationships over the complete inpatient and ambulatory footprint.
• Developed an IHM strategy for a multi-state Blue plan to vastly advance its capabilities to improve the health of its members while remaining affordable.
• Designed a market-leading integrated cancer model for large IDN, bringing together all aspects of oncology care under a single risk-bearing entity that would dramatically cut the cost of cancer care while improving outcomes.
• Utilized Oliver Wyman-developed IHM framework as a road map for the transformational strategy of a regional health plan seeking to compete on the basis of cost and quality.
• Built a seniors-specific IHM strategy for a health delivery system focused on the seniors segment.

Healthcare reform will affect nearly every aspect of your business. While you face material, long-term shifts in profitability, membership, and sources of competitive advantage – to name just a few – you also need to account for the short-term pressures of a contracting market and heightened competition. Oliver Wyman recognizes this challenge and focuses its state-of-the-art analytics and decades of experience squarely on delivering tangible results in a short time frame while preparing the organization to win in the future marketplace.

Our Strategic Growth expertise helps healthcare organizations pick high-growth markets and build winning capabilities. In a post-reform world of commoditized products and exchange-based distribution, we believe retail strategy and capabilities will prove critical, and Oliver Wyman clients count on our expertise in branding, segmentation, and consumer engagement.

Oliver Wyman's Strategic Growth expertise enable our clients to:

Accelerate immediate market impact by using proprietary customer science and market analytics to optimize their short-term, go-to-market decision making. We've helped hundreds of clients better understand which customer segments to target, what those segments buy, why, and at what price levels.

• Plan for the unknowns of healthcare reform through a deep understanding of the regulation and its impact on future sources of growth and margin across customer segments, value chain components and white space opportunities.
• Differentiate their long-term growth strategies through a fact-based understanding of market trends, change drivers, company position, and capabilities. Oliver Wyman helps clients make key strategic choices around market and segment focus, profitability, operating models, and organizational alignment that enable a differentiated position in the future marketplace.
• Engage the entire organization in achieving success through multi-level performance transparency that supports strategic, operational, functional and general business planning. Using a series of dashboards, performance scorecards, planning tools, and training modules, we've helped our clients drive accountability throughout their organizations.

Specific examples of our Strategic Growth work include:

• Created a three- to five-year seniors strategy for a state-based plan to extend and protect the company's position in Medicare. Work focused on early-retiree capture, segment targeting, new product launch, and distribution/operational capabilities. The company exceeded its Medicare membership growth goals by 100 percent.
• Conducted individual market disruptive distribution study for a national managed care organization's innovation and incubation team. The resulting strategy enabled the client to break into untapped segments and grow three new channels.
• Completely overhauled a regional commercial plan's go-to-market strategy after an exhaustive market assessment and internal sales capabilities audit. After reorganizing sales and account management resources against market opportunities, the client beat all membership growth targets and has achieved record profitability for the past two years.
• Developed local growth plans and national “opportunity portfolio dashboard” for senior leaders at a national carrier to measure and track performance. Client experienced year-over-year sales in excess of forecast membership and a “natural improvement” in team's ability to perform to new target expectations.

In a post-blockbuster world, one-size-fits-all drug development and commercialization cannot succeed. Oliver Wyman believes that a much more nuanced approach is needed, one that recognizes the distinct characteristics of different submarkets—ecosystems—each with distinct dynamics, stakeholders, and economics. To operate effectively within these emerging ecosystems, companies need:

• Critical insight into the portfolio of current and future products, focusing on how it maps to the healthcare ecosystems, and how your business—from R&D to commercialization to distribution—must adapt to the unique requirements of each ecosystem.
• A pathway to the future based on an analysis of your current situation, likely market shifts, and the full range of strategies for migrating to an advantaged position in the new landscape.
• Short-term strategies to maximize access and profitability for new products that must clear a "higher bar" to compete and satisfy requirements for both clinical and economic impact that are emerging with value driven healthcare markets.

After several decades of relative stability and predictability, pharma today faces a genuinely chaotic new world. Favorable conditions that prevailed for decades—consistent innovation flow, a predictable regulatory environment, relative freedom in U.S. pricing—have reversed. Supportive tailwinds have become stiff headwinds.

Leading companies are recognizing the need to transform R&D away from a mindset that was formed during the abundant period of the '90s. Oliver Wyman helps these companies to:

• Fully embrace the challenges payers face and develop products with a true value focus: Earlier payer engagement and trials constructed to reveal a medicine's value will be key going forward.
• Orient product and portfolio strategy to make the most out of what they have; rather than "What do we weed out?", ask "How do we make what we have work?" 
• Follow the science toward the right patients; figure out how to leverage personalized medicine to identify patient subgroups that will benefit most.
• Focus and build areas of differentiable capability by assessing therapeutic area strength and discovering the degree of focus required to win.
• Bring the best of internal and external perspective to R&D, embedding business development into the larger R&D framework to establish a less biased portfolio view.

Public and private healthcare systems are under immense pressure to increase access and quality of care while constraining cost. From reform in the US and national budget crises in Europe, to shifting demographics in Japan and demand for universal care in the up-and-coming markets of Asia and Latin America, global economic forces are pushing drug costs into the spotlight. No longer do incremental safety and efficacy claims justify a higher price. Even in areas of high unmet need—areas like oncology and autoimmune diseases—payers are demanding more proof of value. They want to understand how new medicines affect their economics, and the resulting mandate for pharma is clear: Prove it.

The tactics pharma has employed over the past decade simply will not prevail in the next one. But we believe the industry is up for the challenge—and Oliver Wyman can help. 

Oliver Wyman can prepare pharmaceutical companies to thrive in this new environment by:

• Understanding the impact of new drugs on the economics of Payers and Providers, leveraging robust data that demystifies elements of healthcare cost across specific diseases and patient segments.
• Developing strategies for proving the value of new medicines, integrating clinical and commercial strategies with health economics to ensure optimal product positioning at launch.
• Managing the evidence generation lifecycle, designing programs to demonstrate the long-term value of products to the right stakeholders at the right time, from product launch through loss of exclusivity and beyond.
• Aligning pharmaceutical portfolios for future healthcare system realities, assessing the strength of the portfolio from a market access perspective and optimizing evidence generation investments across assets.
• Redesigning market access organizations for the future, creating winning teams and operating principles that blend clinical, medical, and commercial expertise to prove the value of therapeutic innovation.

Vaccines have become a bright spot for pharma and biotech. With the advent of blockbuster products such as Prevnar™ and Gardasil™, total annual vaccine revenues have grown on average almost 20 percent per year for the last 10 years. This significant, double-digit growth is expected to continue, driven by the commercial expansion of prophylactic vaccines and the emergence of therapeutic vaccines. However, vaccines present a unique set of challenges to the entities and institutions involved in their development, manufacturing, and distribution.

For over 20 years, Oliver Wyman has been at the forefront of the vaccine space, partnering with manufacturers, investor groups, private foundations, and global health institutions alike to develop differentiated answers to their strategic and operational questions. Through countless prior engagements with public health organizations, such as the Gates Foundation and WHO, as well as leading multi-national and developing-country vaccine manufacturers, Oliver Wyman has become a recognized vaccine thought leader with unparalleled industry knowledge, highly refined methodologies and datasets, and a deep expert network.

Oliver Wyman's vaccines expertise extends to:

Developed market growth strategy – Vaccine markets in developed countries represent the bulk of current revenues for most multi-national manufacturers, but low coverage rates in these markets represent a significant growth opportunity – just one percentage point increase could increase annual sales for some manufacturers by 100 million USD.

Emerging market entry and growth strategy – Oliver Wyman estimates emerging vaccine markets will grow on average five times faster than developed markets over the next five years. But to capture the opportunity, manufacturers must develop new business models (e.g. locally owned assets or new partnerships), to address the changing private versus public market dynamic, increasing competition from local and other international manufacturers, and an evolving regulatory environment.

Supply chain strategy and operational improvement – Commercial entities must take a critical look at the way they manufacture and distribute their products in emerging markets. If building new facilities, important decisions include proximity to current and potential markets; if expanding existing facilities, new capacity must be added without putting the current market supply at risk.

R&D portfolio and product profile optimization – Forty infectious diseases remain for which no approved vaccine exists, and other diseases like cancer may have cures in the vaccine space. Vaccine developers and investors have three choices:

• Pursue incremental innovation within existing vaccine-preventable diseases and markets.
• Extend existing innovation to new markets, which may require moderate to significant product profile redesign.
• Innovate around new disease targets, balancing the technical feasibility with potential market attractiveness.

Vaccines and broader pharma integration – In many commercial entities today, the vaccine unit often operates as a standalone line of business.  However, integrating vaccines into broader biopharma can produce greater R&D innovation  and other synergistic advantages. To successfully manage such a change, manufacturers need to recognize the inherent differences in the two spaces and identify the institutional knowledge, relationships, and assets that can be leveraged.

Oliver Wyman partners with leading pharmaceutical and biotech companies to address strategic issues pertaining to clinical innovation and licensing strategy, development, and commercialization.  We have significant clinical experience within our practice which allows us to develop specialization in key areas such as vaccines, biologics, oncology, and specialty therapeutics. Over the past decade, our unique approach and proprietary models have generated superior value for clients ranging from multinationals to research-based start-ups.

Offering & Experience

The evolving marketplace is becoming increasingly interconnected, requiring many players to change their value propositions to compete. At the same time, challenges of innovation are at an inflection point. Our industry-wide perspective combined with specialized capabilities provide our clients with strategic and operational advice in areas where new offerings and business models are needed to compete. Whether it is oncology, biologics, or specialty pharmaceutical, we blend clinical expertise and business acumen to deliver results in licensing, development, commercial, and supply chain that enable our clients' success.

Global health foundations and institutions also partner with Oliver Wyman to devise strategies that apply therapeutic technologies to advance public health. In this area, Oliver Wyman provides strategic counsel on supply and distribution strategies, global health awareness and education campaigns, and the identification, quantification, and prioritization of public health investments.

All of Oliver Wyman's Health and Life Science strategies are grounded upon rigorous quantitative and qualitative research, and leverage the practice's deep understanding across the payer, provider, and pharmaceutical industry sectors. A wide array of pharmaceutical and biotechnology firms, public health organizations, private funds, and clinical research organizations have discovered deep value in Oliver Wyman's unique combination of industry and subject matter expertise.

Oliver Wyman works with payer organizations across the U.S. to redefine operating strategies that will drive improvements in the quality and affordability of care.  Our integrated approach toward improving health management not only drives near-term performance, but also can be applied to fundamentally transform traditional insurance operating models.

Offering & Experience

Oliver Wyman is committed to helping health insurers to compete on the basis of quality and affordability. Sustainability rests on shifting to more effective strategies for managing escalating utilization and unit-cost trends.  Oliver Wyman's Integrated Health Management (IHM) framework is a comprehensive approach to thinking about care management and delivery.  IHM enables clients to devise and implement strategies that reduce unnecessary and inappropriate medical expense, while engaging members in more active health management.  This approach extends beyond the plan to address the needs of all stakeholders, including providers, employers, members, and others.

The breadth of the IHM platform derives from a decade-long track record of supporting payer organizations in the development of defined strategic plans.  Clients call on our team's deep expertise to help devise solutions for specific issues.  We have a long track record in accelerating top-line growth.  Our team of Medicare specialists has helped payers across the U.S. devise profitable strategies for the senior population. In combination, Oliver Wyman's cross-functional expertise and proprietary analytical frameworks support true healthcare innovation.

Oliver Wyman also advises service and technology firms that work within the health insurance industry. With deep expertise across the healthcare landscape, Oliver Wyman works with clients to evaluate, prioritize, and initiate strategies focused on capturing demand for new service models, technologies, and other innovations, ultimately filling gaps in the current healthcare value chain.

Universally, these strategies are grounded on rigorous quantitative and qualitative research and leverage the Health and Life Science practice's deep understanding across the healthcare landscape.  Our clients also benefit from Oliver Wyman's extensive actuarial acumen. A wide array of payer, disease management, provider, and technology organizations have discovered deep value in Oliver Wyman's unique combination of industry and subject matter expertise.

It is a time of immense change for healthcare providers. In the wake of healthcare reform, decades of runaway costs, and reimbursement compression, providers' traditional way of doing business is being challenged. Faced with pressures on every front—regulatory, competitive, financial—leadership teams are increasingly searching for ways to transform their organizations for a new healthcare world.

Oliver Wyman believes the answer to their challenges is value-based care. Tomorrow's successful healthcare providers will control costs and improve quality through tightly integrated, patient-centered clinical models. They will engage in robust patient engagement that leads to better health and more appropriate utilization. And they will use aligned incentives to reduce waste, focus physicians on proven best practices, and encourage innovation.

Getting to the new model is not easy. It requires broad-based changes in culture, market structure, payment models, clinical integration, and profit dynamics—all centered on creating value. Oliver Wyman's team partners with senior provider leaders to create practical transformation pathways based on measured, step-by-step initiatives. Our results-driven approach helps providers preserve profits, grow share, improve safety and quality of care, and effectively manage clinical risk throughout their evolution.

Offering & Experience

Oliver Wyman offers a robust suite of services aimed at optimizing clinical and business models. These services help provider organizations make the critical decisions that go into meeting the demands of reform and the emerging environment of value-based care. Our proprietary tools and methodologies are designed to help clients implement sustainable, differentiated value-based models capable of competing on cost and quality in a rapidly changing marketplace. Through the broader Oliver Wyman organization we have access to a remarkable range of deep expertise: from economic analysis and actuarial science to branding to change management. Our 360-degree perspective comes from decades of working not just with healthcare providers, but with payers, consumers, and healthcare IT providers.

It is easiest to understand our offerings as a series of steps toward transformation:

• Enterprise strategy development to understand the impact of market forces, assess organizational positioning within local markets, map and evaluate strategic options, identify greatest opportunities, build a business case, and determine how to best pursue priority initiatives (strategic partnerships, new businesses, capital allocation)
• Fee-for-service (FFS) to fee-for-value (FFV) migration planning to crystallize “end-game” objectives, identify optimal starting points, and formulate a clear implementation roadmap that prepares your organization to capitalize on emerging value-based opportunities while maximizing existing fee-for-service economics
• Clinical and physician integration strategy development to inform physician targeting (e.g., which physicians are strategically important based on referral flow in FFS and their centrality in FFV), determine how to best create value across the continuum of care, and facilitate related deal structuring and management arrangements (e.g., PHO, IPA, co-management, ACO, etc.)
• Care model opportunity assessment to identify high-priority areas to improve cost effectiveness and quality of care across populations, conditions, and episodes based on the underlying population health / demographics and your organization's readiness
• Care model design and implementation support to build all necessary components of a successful value-based business – including clinical model redesign, new reimbursement models, internal incentive alignment, enhanced patient engagement, strategic sourcing, organizational enablement, and new performance management systems
• Enterprise readiness assessment to identify gaps in organizational capability and infrastructure, inform capital planning, and frame timing to prepare for emerging population health enablement and value-based care needs
• Risk contracting and payer relationship management to structure appropriate risk arrangements with payers as well as build the necessary risk and performance management infrastructure to effectively manage risk contracts
• Commercialization to develop a compelling service offering, optimize pricing, increase market share, and build a sustainable brand

Examples of recent provider engagements include:

• For a major hospital system, Oliver Wyman developed a "cancer network of excellence” creating a widely embraced vision and operational structure for integrated cancer services that dramatically improved patient care and allowed for commercialization success (doubling client revenues in 2 years).
• Designed and implemented an entirely new Clinical Quality and Patient Safety infrastructure for a large multi-market integrated delivery network (IDN). Oliver Wyman helped integrate patient management, improve physician outreach, enhance information flow, and realign hospital governance structures and physician relationships over the complete inpatient and ambulatory footprint.
• For a regional delivery system, Olive Wyman developed a strategic planning roadmap to address the estimated 20-30% revenue decline hospitals face with the market shift to fee-for-value. These strategies included the pursuit of operational cost efficiencies, participation in care models, and fixed cost restructuring to compete in FFV environment.
• For a large IDN, Oliver Wyman assessed the market opportunity for the creation of a Cardiology Services Program and upon defining the overall business case, recommended a clinical delivery and business model to build a specialized program and ultimately enable the client to increase market share.