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Healthcare companies face enormous challenges during this era of reform. The future marketplace will require new paradigms to realize the vision of affordability and quality. Change will impact payers, providers, and pharmaceutical companies alike and require unprecedented collaboration at the intersections.
Recognizing the power of a systemic view, healthcare companies are turning to Oliver Wyman. Our deep expertise across the healthcare landscape is centered in integrated health management – a differentiated approach proven to drive critical transformation. Our perspective in life sciences is focused on transformational changes that pharmaceutical and biotechnology companies need to make in a world where product innovation is more challenging and value is measured in patient outcomes.
Transforming Healthcare is the official blog of Oliver Wyman's Health & Life Sciences practice, offering ideas from Oliver Wyman's global team of experts as well as the latest in trend-bending market news from across the web. Join our community of healthcare innovators here.
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.
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:
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.
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.
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:
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:
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.
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.
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:
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.
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.
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.
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.