Healthcares New Entrants: Who will be the industrys Amazon.com? - - PowerPoint PPT Presentation

Healthcare’s New Entrants: Who will be the industry’s Amazon.com?

June 3, 2014 FierceHealthcare FastCast

PwC

Today’s presenters from PwC

Vaughn Kauffman Health Industries Global New Entrants Leader Trine Tsouderos Director, PwC Health Research Institute

2

PwC

A New Health Economy is emerging

• Altered funds flow
• New care delivery

models

• Realignment of

existing players

• Disruption by

new entrants

Slide 3

• New economic

principles are beginning to prevail.

• Value will become the

driver of success, rather than volume.

• Demographic and

socioeconomic changes are creating a new role for empowered consumers.

Health Research Institute

PwC

Healthcare is following in the footsteps of other industries

Industry Past Present Industry Present Future

Banking Travel Retail Health Services Pharma

Limited bank hours and locations Limited travel agency hours and locations Standardized marketing and inventory Limited office hours and locations Standardized treatment plans Blockbuster drug model ATMs and mobile banking available 24/7 Online booking with real time pricing Customized web-site with targeted, data- driven promotions Personalization of treatment and protocols On-demand services available Personalized medicines with a focus on

• utcomes

1980s – 2010s On- going shift

Health Research Institute Slide 4

PwC Slide 5

Nearly half of Fortune 50 companies are new entrants

Health Research Institute

Examples: Wal-Mart Apple Ford Motor AT&T CVS Caremark Verizon Target Walgreen Co. PepsiCo Comcast Amazon.com

PwC

How open are consumers to new entrant

• fferings?

Slide 6

In late 2013, PwC’s HRI sought to gauge consumer readiness for new entrants

• fferings and estimate their

impact on traditional provider revenues. PwC’s HRI surveyed 1,000 US adults on perceptions of healthcare and comfort with

• ptions being developed by

new entrants.

Check for an ear infection at home using a device attached to a phone Have a wound or pressure sore treated at a clinic in a retail store or pharmacy Get an MRI at a clinic in a retail store

• r a pharmacy

Have chemotherapy at home Have a pacemaker or defibrillator checked at home by your physician

Health Research Institute

PwC

Consumers are ready to abandon traditional care models for more digital, do-it-yourself options

Slide 7 Ah

Use an at-home strep test Check for ear infection using device attached to phone

Percent of respondents answering “Very likely” and “Somewhat likely” to consider these alternatives:

Source: HRI consumer survey, 2013 and 2011

54.8%

Health Research Institute

58.6% 46.9%

Evaluation of minor skin conditions

PwC

Even when it comes to more intensive services, consumers are open to new options

Slide 8

Percent of respondents answering “Very likely” and “Somewhat likely” to consider these alternatives:

Source: HRI consumer survey, 2013 and 2011

Health Research Institute

Have a pacemaker or defibrillator checked wirelessly by a physician

42.6%

Have at-home chemotherapy Get an MRI at a retail clinic or pharmacy

36.7% 34.4%

PwC

Consumers’ desires for new options puts at least $64 billion into play, with more to come

$796m for

debridement

$358m for

evaluation of contact dermatitis and other minor rashes

$694m for

Urinalysis by dipstick

• r tablet reagent

$2.9b

for routine ECG

$42.1b

for office and

• utpatient

clinic visits

$110m for

pacemaker evaluation

$3.3b for

chemotherapy administration

$11.6b for MRI

without contrast

$1.9b for at

home kidney treatment

HRI analysis, 2011 Truven Databases

Slide 9

PwC

It’s not just tech-savvy millennials who want something new

Slide 10 Health Research Institute

Middle-aged consumers, caring for their kids, themselves and perhaps their parents, are most

• pen to new,

affordable, convenient digital, DIY, home-oriented

• ptions.

PwC

Consumers are ready to receive care in new ways, in new places

Slide 11

• 82% of survey

respondents said they were open to trying new, non- traditional ways of seeking medical attention or treatment.

Health Research Institute

PwC

Consumers’ embrace of retail-based medical clinics is a bellwether of changes to come

In 2007, proportion of HRI consumer survey respondents who had visited a retail clinic:

Slide 12

9.7% 35%

Health Research Institute

In 2013, proportion of HRI survey respondents who had visited a retail clinic in the last 12 months:

PwC

Consumers want to shop for care in the same way they shop for books, music, hotel rooms and plane tickets

Slide 13 Health Research Institute

PwC

New entrants already are creating technologies to meet consumers’ healthcare needs and desires

Slide 14 Health Research Institute

PwC

HRI estimates Americans spent an additional $267 billion on health-related goods and services in 2012

Slide 15

Americans spent $2.8 trillion on healthcare in 2012, an oft-cited figure that ignores the lucrative fitness and wellness industry. HRI estimates the nation spent another in 2012 on the fitness and wellness market.

$267 billion

$59.20B

for sporting goods

$93.62B

for nutrition

$11.25B

for alternative healthcare

$61.6B

for weight loss

$40.33B

for fitness

$1.30B

for mobile health apps Health Research Institute

PwC

A New Health Economy will emerge over the next decade

Slide 16

Consumer Engagement Data Innovation Regulation Compliance Business Model / Payment Care Delivery Strategic Capabilities 10 years Digital Presence Two way communication New sources, but fragmented Data driven consumer behavior changes Pilots and business model simulations Knitted into the core business Experimentation Fully compliant Fee-for-service; B2B2C Value-based; B2B2C2B Hospital / Physician centric Consumer / Patient centric

Health Research Institute

PwC

New entrants and traditional healthcare companies will need new strategies

Slide 17 Health Research Institute

Health organizations must understand consumers’ needs and desires, creating new options. Integration and accessibility of data will be key to building a seamless, coordinated health system. As partners to newer players, traditional healthcare companies can serve as guides to the regulatory and payment maze. Rethink marketing strategies to include new influencers, such as patient bloggers. Re-evaluate pricing models and develop new ways to add value. Consumers will reward those who make healthcare as easy and affordable as online shopping for travel and entertainment.

PwC

Questions?

Slide 18 Health Research Institute

PwC

For more information

Slide 19

• www.pwc.com/us/healthcare-new-entrants
• www.pwc.com/hri

Vaughn Kauffman Health Industries Global New Entrants Leader (440) 258-2729 Vaughn.a.kauffman@us.pwc.com Trine Tsouderos Director, PwC Health Research Institute (312) 298-3038 Trine.k.tsouderos@us.pwc.com

Health Research Institute