The Tech Attack Will Transform Healthcare By 2020
Chicago – Oct. 23, 2014 – Venture capitalists poured $2 billion into health tech in just the first six months of 2014. A passing fad? No, according to a new report by Oliver Wyman: This ongoing investment is the single biggest enabler of a new health and wellness market, creating a clear path to its security and sustainability.
The Patient-to-Consumer Revolution: How High Tech, Transparent Marketplaces and Consumer Power Are Transforming U.S. Healthcare shows how developments already well underway will lead to drastic improvements in costs, quality and access to care, largely through unleashed consumer demand fueled by technology. This “tech attack” will disrupt the market, driving unprecedented levels of predictive and preventative capabilities and bringing increased transparency into how care is delivered in the United States.
Drawing on more than two years of research, the report synthesizes the work of co-authors Tom Main, partner in the global consulting firm Oliver Wyman and founder of the Oliver Wyman Health Innovation Center, and Adrian Slywotzky, a partner emeritus at Oliver Wyman and best-selling author of “Demand” and “Profit Zones.”
“We’ve known for some time that a healthcare model that waits for people to get sick and then treats them can no longer be sustained financially,” says Main. “But when we start to shift to a model based on prevention and wellness, remarkable things happen.”
To illustrate the transformation coming in what authors call Health Market 2.0—the future health market—Main and Slywotzky point to tech attacks in other industries that have sparked consumer demand and upended the status quo to create entirely new markets, including personal transport with the emergence of Uber. How will this play out in healthcare? Take the fitness tracker, for example: “Connect it to your electronic health record system, run it through sophisticated analysis and predictive modeling, and it becomes something different—a window into your ongoing health and activity that can be used to spot problems before they happen and personalize your care,” says Main.
In a marketplace where consumers make decisions based on real care and cost information, new technologies will do more than treat an individual, according to the report. They will fuel an engine of competition and innovation on patients’ behalf. The authors outline three distinct movements driving the shift to consumer-focused care:
- Personalized apps, wearable sensors and social networks encouraging “life logging” are accelerating the quantified self movement, shifting social and cultural values and providing smart care teams with the tools needed to make personalized care a reality.
- Transparent consumer markets will shift the basis of competition from reputation and referrals to price, value and outcomes, moving healthcare from a business-to-business to business-to-consumer market.
- Smart care teams comprised of physician assistants, nurses, social workers, coaches and doctors will match patients to the optimal level of care and support and—by expanding their focus to encompass population wellness and prevention— will soon deliver a dollar’s worth of care for 70 or even 60 cents.
“The important thing to understand is how rapidly things are changing,” says Main. “Only a few years ago, the most advanced healthcare providers hoped to cut the cost of care by 20 percent. In the last year, they’ve told us that goal is not nearly ambitious enough.” According to the report, the disruption in the health market will lower costs by 40 percent, produce 10 more good years of living and improve the consumer experience by 300 percent.
To learn more about the future health market, download the full report here.
About Oliver Wyman
Oliver Wyman is a global leader in management consulting. With offices in 50+ cities across nearly 30 countries, Oliver Wyman combines deep industry knowledge with specialized expertise in strategy, operations, risk management, and organization transformation. The firm has more than 4,700 professionals around the world who help clients optimize their business, improve their operations and risk profile, and accelerate their organizational performance to seize the most attractive opportunities. Oliver Wyman is a wholly owned subsidiary of Marsh & McLennan Companies [NYSE: MMC]. For more information, visit www.oliverwyman.com. Follow Oliver Wyman on Twitter @OliverWyman.