The Patient-to-Consumer Revolution

In the much anticipated follow-up to The Volume-to-Value Revolution, Tom Main and Adrian Slywotzky describe how seemingly unrelated phenomena—high-tech health entrepreneurs, personal fitness devices, retail clinics in big-box stores, “smart care” teams, and IBM Watson—are creating a new health market where demand trumps supply.

The expanded cast of health companies enables unprecedented predictive and preventive care delivery that is convenient, seamlessly connected, and coordinated across geographic boundaries. Meanwhile consumers have access to a marketplace with transparency around price, quality, outcomes, and value. Main and Slywotzky predict this new market will lower costs by 40 percent, produce 10 more good years of living, and improve consumer experience by 300 percent. With more than a trillion dollars at stake, this transformation represents the greatest value migration in history. This paper shares how traditional players and new entrants can do more than participate in this value shift but lead it through innovative business models and partnerships.


When an industry faces a transition like the one occurring in healthcare, only the strongest, quick-to-react incumbents survive, in the likes of IBM, Apple, and Amazon. What, then, will it take for healthcare incumbents to play a meaningful role in Health Market 2.0? Unlocking the incumbent’s dilemma is no easy task. The rate of failure far exceeds that of success—and in most recounts of industry transformation the incumbents end up as a footnote. Through in-depth leadership discussions with incumbents and innovators, and careful study of non-healthcare success stories, we found the following six insights to unlocking the incumbent’s dilemma:

1.      Change your frame of reference. Health Market 2.0 combines health and wellness, includes retail, and shifts the market from being supply-led to demand-led. It also breaks the “healthcare is local” paradigm.

2.      Be aware of your place on the value ladder. Thinking you are best-in-class and an industry standard when you are about to be commoditized by a better value alternative is a peril within markets that are undergoing transformational change.

3.      Know it is not a level playing field. Many of the new players in Health Market 2.0 are competing at silicon speeds, in a global marketplace, using ecosystem thinking, and constantly innovating. Not surprisingly, they are favored by capital markets. Partnering provides access to these advantages.

4.      Run skip generation plays. Continued incremental improvements on the current business model are not sufficient. Incumbents need to execute leapfrog strategies with entirely new capabilities (e.g. big data, passive monitoring, and retail pharmacy integration) and novel partnerships to thrive in Health Market 2.0.

5.      Don’t go it alone. Bridging health and wellness, becoming a consumer company, redefining personalization, deploying big data, developing complex adaptive workflows, and leveraging passive monitoring to prevent most acute events—these are massive but critical changes. Partnering will accelerate your path and is likely a necessity.

6.      Leadership is the scarcest commodity. While it feels less risky to focus on current Health Market 1.0 business model innovations and improving the “today return picture”, history tells us unmistakably that even the very best run incumbents hemorrhage value as markets transform. Leadership, not refinement, is what’s needed to survive.


The Patient-to-Consumer Revolution

Tom Main, Partner and U.S. Market Leader Answers 4 Questions
  • 1Why is there such great focus on consumer tech companies in The Patient-to-Consumer Revolution?

    Consumer tech companies like Apple, Amazon, and Google not only meet demand—they create it. So why not do the same thing in health and wellness? The combination of big data, mobile apps, social networks, and quantified self will create a market for better living and prevention. Imagine billions of clinical data points integrated in real time preventing acute chronic disease manifestations. Once consumers experience this, they’ll never settle for the status quo.

  • 2What’s wrong with the status quo?

    Many things. Here are two important ones: We pay healthcare providers for how many things they do to the patient rather than for making the patient healthy. And it’s an almost totally reactive system. We wait until the patient gets sick and then try to patch him up. Instead, we should be keeping people from getting sick in the first place. This approach has universal impact but most so among consumers with multiple chronic diseases who represent 15 percent of the population but drive 60 percent of the costs.

  • 3You say the proper approach for doctors is the “smart care team.” How is this different from a PCMH?

    With patient centered medical homes, consumers work with a selected care team to stay healthy and to coordinate their care when they are sick. The smart care team takes that idea and magnifies it by using big data to improve prediction and personalization, passive monitoring to stay in constant touch on key health values, and virtual care models and retail pharmacies to make access much easier.

  • 4What’s the biggest change you’re seeing in healthcare right now?

    The biggest change is the rise of the consumer market and with it remarkably better health and wellness. First, we see the quantified self as fuel for smart care teams to be in 24/7, real-time communication with consumers, personalizing the relationship, and shifting the model to prediction and prevention. Second, with increased transparency, consumers will shop for health services with the same levers available in any other consumer-centric market (price, quality, crowd sourcing)—and in doing so, will shift the basis of how providers compete.