What healthcare companies and policymakers must do to survive digital disruption

Drawing on our analysis of the digital transformation of healthcare, we have identified a set of recommendations for business leaders and policymakers.

Digital is supporting and accelerating the systemic shift to value-based healthcare. New intelligence, in hardware and other objects, is bridging the gap between the digital and physical worlds. Hospitals, physicians’ offices and payers are accessible with a click, tap or scroll. Highly connected hardware components, along with smart sensors and devices, help payers and providers give consumers what they want: better health outcomes at lower cost, coupled with convenience and a better experience.

Today, delivering consumer health outcomes offers a distinct competitive advantage; in the next few years, it will become a catalyst for transformation. Beyond that, it will be nothing less than a strategy for survival.

Regulatory reforms are shifting the healthcare model in many markets from fee-for-service to pay-for-performance. In these new models, healthcare providers are paid based on the clinical outcomes they deliver, rather than on the number of services they provide. This means incentives for providers (by moving part of the risk to them) to not only keep the population they cover healthy in the first place, but also improve service quality while keeping costs down. Informed consumers are demanding more transparency and better quality from their health systems.

Potential winners and at-risk segments

In a period of disruption, when winners usually emerge from the ‘bottom up’ and ‘outside in’, thriving organizations will be those that see and react to early-warning signs, delay disruption innovation long enough to beat it, identify ways to transition to adjacent segments, or even exit segments or markets entirely. Healthcare, an industry that trails almost all other industries in terms of increasing productivity, is no longer safe. A series of failed efforts will soon be overcome by scalable offerings, accelerated by supportive regulatory, economic, demographic and technological forces. Those most at risk will be incumbents steadfast in the status quo or those that oppose hedging the risk inherent in disruptive markets through diversification. 

The biggest winners will be those that embrace the importance of creating an enduring customer experience and find ways to be relevant across the value chain. To deliver this next-generation experience in healthcare, organizations will need to focus on developing, delivering and maintaining services that provide a seamless experience, simplicity, coordination of care and trust. To achieve this, organizations will need the right infrastructure and organizational capability to enable this new experience.