Digital Healthcare Trends and Opportunities
March 30, 2020| Reading Time: 5 minutes
Digital (and disruptive technology) is opening up huge opportunities for Healthcare payers and providers, but the future is still very unpredictable. Similarly to other verticals, we’re seeing increased internal and ecosystem demand for access via APIs and (beginning to see) disruption by both Health/Insurtech insurgents and non-traditional players (e.g. big tech such as Amazon entering Healthcare). As a result, the majority of incumbents are now accelerating their digital strategy, including putting out their digital/transformation roadmap/customer journeys.
The big drivers in the move to digital Healthcare and Health Insurance are:
- Customer expectations – in the modern digital age, customers expect frictionless experiences with multiple digital touchpoints, and want products which are personalized (over 60% of customers are interested in insurers offering healthcare services beyond traditional insurance offerings according to a Bain and Company survey)
- Disruptive technologies – such as AI and automation (and robotic process automation (RPA), and how to use them to deliver business results
- Regulation and data security – more data from more sources which needs to be strictly regulated and secure
- Regionalism – particularly in the US Healthcare system
- Hard to find talent – product managers and developers to support digital transformation efforts
Let’s take a look at some key healthcare trends payers and providers are focusing on when it comes to digital:
No one knows quite what’s going to happen when it comes to Digital in the Healthcare industry, but there are some great opportunities – and one thing which is for certain is that they will be enabled through APIs.
Healthcare Digital Transformation/Digital Enablement and APIs
One opportunity is for better and more affordable care for customers. This TEDx talk covers a great use case:
- A patient having a case of a dermatitis rash flare up at 4am in a hotel room, but they have an important client meeting the following day!
- Being able to use a telehealth system to FaceTime a doctor, who can see and confirm the diagnosis through the video chat
- The doctor pinpointing the patient’s location and forwarding a prescription to his nearest CVS
- A delivery person collects the prescription and delivers it to the patient’s hotel room
- The whole process taking 24 minutes and costing $59 dollars
This example only covers one opportunity for Digital in Healthcare – the list is ever growing, and on the whole they go way beyond cost savings. What’s important is for incumbent Healthcare companies to become adaptable and responsive for whichever trend(s) becomes big. Most likely these trends will be proven by insurgents who can combine healthcare leadership with technology and a lack of technical debt and legacy systems to move quickly, as we’ve seen in Banking for example. The best way for incumbents to become ready to jump on these newly proven trends is to focus on encapsulating their existing business and IT functions as reusable business building blocks (represented as APIs), so that they can move quickly when the time comes and rapidly reconfigure new offerings based on what they already have.
Once they have built out their portfolio of business and IT capabilities, large healthcare companies are able to stand up both internal innovation and meet increasing internal and ecosystem demands for access via APIs – in a real-time and continuous way. With the platform and automated processes in place, they can create new, re-purpose, update and extend, bundle, approve, and deploy products and services (made up of APIs and Services) in days instead of months. Two great examples are Anthem and Kaiser Permanente’s responses to the current coronavirus outbreak:
- Anthem rolling out COVID-19 assessment capabilities through their Sydney Care mobile app for members
- Kaiser Permanente rapidly expanding their telehealth offering to provide the same level of great care, while helping to slow the virus spread
If we again look to banking as the best example of this, Digital has enabled core business functions to be carved out as standalone products and be rapidly launched by nimble innovative companies – e.g. money transfer or branded credit cards. We have yet to see this trend really develop in Healthcare, but there’s a hoard of Lines of Business capabilities that could become separate standalone unicorns.
Health Insurance as a Service/Platform
A great example to look at within the Healthcare vertical is Pharmacy Benefit Management. 10 years ago, there were at least 5 standalone PBM companies in the US that were ranked in the Fortune 500 – almost all of them have now been acquired by Health Insurance payers. And so now, if you’re a large payer or provider, and you don’t want to pay one of your competitors for PBM, you could either create your own (like we’ve seen Anthem do with IngenioRX), partner with an Insurtech, or wait until someone else launches one. Either way, winners will be the ones who can move quickly, and integrate into evolving ecosystems.
Health Insurance as a Platform could also be a major trend in the industry – like a digital marketplace for healthcare functions. Again, winners here will be the ones who can encapsulate existing functionality as a set of ready to plug and play, standardized, and well-designed APIs.
Modernizing legacy core systems (such as EHR, registration, claims) is vital for large Healthcare companies to become responsive not only to the changing digital world, but also ever-changing regulation and directives.
Healthcare IT Modernization
Many Healthcare incumbents are already in the process of IT Modernization, and one aspect of this is the move to cloud. However, there is a major security aspect associated with more and more sensitive data being held in the cloud (not to mention modern data ecosystems where you can’t vouch for the security of others’ data storage). It’s therefore vital to ensure proper governance for all your data at rest and in motion. And there’s the regulatory implications too – large Healthcare companies need to be able to easily show where their data is, who owns it and who consumes it, how many of their APIs and Microservices that use this data are compliant with security protocols and standards.
There’s no doubt that the future of Digital is unpredictable for Healthcare – there are many opportunities and possible trends for new value pools/products/lines of revenue. So, what can incumbents do to become “digitally determined” and responsive, for wherever Digital goes? We have a few recommendations based on our existing partnerships with large Healthcare companies:
So, what can Healthcare companies do to become “Digitally Determined”?
- Be realistic about where you are in your Digital Transformation journey – it’s an ever-evolving process, not once and done
- Design your business for the way it should be, not the way it is now – both from a strategic and operational/technology perspective
- Build out an abstracted layer of business and IT functions, enabling you to plug and play into whatever digital opportunity you want to, and do so in a cost and time saving, and new-reality (more digital and more collaborative) way, while providing a great seamless customer experience
- Provide a force multiplier for hard to find talent – particularly, bring developers out of point-to-point integration/data transmission work so they can focus on big-brain activity that delivers real business results
For information on how you can use a platform like ignite to deliver on these recommendations, check out our industry page.