Population health insights

Part 2: Encountering competitive disruption

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Mar 29, 2019

In the first blog in this two-part series, “The Technology Disruptions Set to Grow in 2019,” we talked about the disruptive force of technology types. In this blog, we cover the new types of competitors that are rapidly emerging to vie for a place in the healthcare delivery space.

 

Delivering the convenience and access patients want, retail clinics, outpatient urgent care centers and laboratory services based in shopping centers are opening across the country. In 2017, 7,693 urgent care centers in the U.S. accounted for nearly 90 million visits and as much as a third of the urban U.S population lives within a 10-minute drive of one of the thousands of retail clinics now available.[i],[ii]

 

Vertical integration—along with the entrance of tech giants like Amazon and Apple into the healthcare market—is also shaking up the competitive landscape. Amazon is venturing into the mail-order pharmaceutical market with its billion dollar investment in Pillpack.[iii] By September 2018, Apple had launched a beta program with at least 90 hospital, health system and clinic partners to pull patient records from EHRs into its iPhone.[iv]  

 

With these moves, these trusted consumer brands could eventually become competitors on the care delivery side. Amazon is piloting a primary care site for some of its employees in Seattle.[v]  CVS has moved quickly to provide virtual care with 24/7 access for urgent care needs—enabling it to compete with health systems for the patient volume and revenue that is driven by consumer demand. Its proposed merger with Aetna would also give it access to troves of claims data to increase its insights into consumers and their health needs.[vi]

 

How will providers absorb the new data streams from these competitors and continue to manage patients’ care? Improved access and financial transparency are good for consumers in the short term, but the cost of care could escalate if the new types of access are not coordinated and put into the right context—at the point of care. Ensuring that these new delivery locations don’t further fragment care will be essential to improving value.

 

Some health systems are fighting back by merging to take advantage of scale against competitors such as CVS and OptumCare, which has about 30,000 affiliated or employed physicians.[vii] For now, a new Fitch Ratings analysis found that their financial performance exceeded expectations.[viii]

 

To continue to succeed, health systems will have to continue to be more agile in the face of a reduced ability to steer patients to providers within their network and reduced visibility into their patients’ overall health. New patient leakage solutions can help health systems gain better insights into and control over their patient referrals. Philips has partnered with Fibroblast, a comprehensive referral management solution, to make that task easier.

 

And strategic partnerships with technology companies that facilitate data sharing across locations and types of data, and that enable health systems to confidently assess and take on risk to manage care outside hospital walls, are needed. Philips is leading this trend by delivering an open-source suite of digital solutions that include remote patient monitoring, automated care pathways, patient-reported outcomes tools, predictive analytics, medical alert systems, and patient medication adherence solutions. All of these can work singly or in combination to help you keep people healthier at home, reduce readmissions and take on more risk-oriented contracts.

 

Every provider is promising to drive down cost and improve quality and access. As the hype settles, solutions that reduce the friction for consumers when accessing care, that provide precise treatment with less direct clinical interaction, and that decrease the suffering and time associated with treatment will likely prevail. Forward-thinking healthcare organizations will embrace the continual disruption as a way to propel them to innovate to better serve their patients.  Working with vendors that understand this and value a true partnership model, can help you get there.

1http://www.ucaoa.org/news/385778/Industry-White-Paper-Forecasts-Patient-Centric-Healthcare-Diversification-of-Services.htm

1https://www.rand.org/pubs/research_briefs/RB9491-2.html

1https://www.wsj.com/articles/amazon-to-buy-online-pharmacy-pillpack-1530191443

1https://www.beckershospitalreview.com/healthcare-information-technology/8-more-hospitals-clinics-join-apple-s-health-records-project.html

1https://www.healthcareitnews.com/news/amazon-says-it-building-primary-clinics-employees

1https://www.forbes.com/sites/forbestechcouncil/2018/07/06/disrupting-health-care-from-amazon-to-cvs-data-is-at-the-heart-of-it/#614725731c06

1https://www.bloomberg.com/news/articles/2018-04-09/30-000-strong-and-counting-unitedhealth-gathers-a-doctor-army

1https://www.fitchratings.com/site/pr/10027221

About the author

Niki Buchanan
Niki Buchanan, 
General Manager & Business Leader, Philips
Niki Buchanan is General Manager & Business Leader for Philips PHM. A dynamic and versatile healthcare executive, Niki uses her distinctive customer satisfaction and product optimization methodology to lead improvements across the Health IT spectrum.

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