The healthcare sector in the United States is subject to several trends. First, driven by the growing population and higher life expectancy, healthcare spending is rising fast. Furthermore, investments in digital technologies within healthcare are enormous, and are rising fast, causing healthcare costs to escalate and profit margins to shrink (Allen, 2019). PwC reported that investors have poured $12.5 billion into digital health ventures in the years 2017 and 2018. Comparing this to 2013, the number depicts an increase in funding over 230%, and an increase of 67% percent of the average funding deal (Siwicki, 2019).
These trends are causing three main problems within this sector, which are strongly affecting patients in the US. Namely, the affordability, accessibility, and quality of healthcare (Allen, 2019). Despite the huge investments in digital technologies and the steady stream of technological advances that are being introduced in healthcare on a yearly basis, these technological advancements have not taken care of the three key problems of the healthcare sector. The lower costs, higher quality and greater accessibility have not yet come about in the way that one could expect with all the technological advancements that have come up in the past years (Hwang and Christensen, 2008).
According to Hwang and Christensen (2008) the lack of improvement in the healthcare sector is due to the fact that these advances are not being paired with business model innovations. This is exactly where digital health ecosystems come in. In the long term, digital health ecosystems could cause the disruption of the traditional business model in healthcare.
Digital health ecosystems connect different stakeholders in the healthcare industry. This means that providers, payers, policymakers and patients all have access to data in the ecosystem. In a digital health ecosystem, the digital innovations brought by technology start-ups, high-tech giants, providers and traditional healthcare equipment manufacturing companies can be interconnected (Friesdorf et al., 2019).
Then, what do digital health ecosystems actually change about the delivery of healthcare? For starters, one’s smartwatch could track and instantly upload information on a patient’s health status. Doctors could remotely monitor this patient’s health with the information that is being gathered. Furthermore, by storing and analysing data in real-time, doctors and managers can benchmark performance and increase the accuracy of their diagnosis and treatments. Next to this, patients have open access to providers of care from any setting, for example from the office or their home. By unbundling health care, the disposable part of a traditional visit, the time spent on travelling and the cost and efforts that come with it, can be saved. Healthcare will become more accessible, and customer centric if a doctor offers online coaching and tracking, as patients can monitor their health through different touchpoints (Harvard Business Review Analytic Services, 2017). Patients can choose facilities and appointments most suited to them, and they can be encouraged to engage (Siemens Healthineers, 2019). Engaging and educating patients will ultimately lead to healthier people.
Siemens is a company that tries to tackle the aforementioned cost, quality and accessibility issues by providing the health care sector with a digital health ecosystem platform, alongside their traditional healthcare technology. You can check out Siemens’ website for more information on digital health ecosystems: https://www.siemens-healthineers.com/en-us/healthineers-digital-ecosystem/digital-ecosystem.
References:
Allen, S. (2019). 2019 Global health care outlook: Shaping the future. [online] Deloitte, pp.2- 4. Available at: https://www2.deloitte.com/content/dam/Deloitte/global/Documents/Life-Sciences- Health-Care/gx-lshc-hc-outlook-2019.pdf [Accessed 5 Sep. 2019].
Friesdorf, M., Deetjen, U., Sawant, A., Gilbert, G. and Niedermann, F. (2019). Digital health ecosystems: A payer perspective. [online] McKinsey & Company. Available at: https://www.mckinsey.com/industries/healthcare-systems-and-services/our- insights/digital-health-ecosystems-a-payer-perspective#.
Harvard Business Review Analytic Services (2017). The Power of Digitalizing Healthcare. [online] Harvard Business Review Analytic Services. Available at: https://hbr.org/sponsored/2017/11/the-power-of-digitalizing-health-care.
Hwang, J. and Christensen, C. (2008). Disruptive Innovat1ion In Health Care Delivery: A Framework For Business-Model Innovation. Health Affairs, [online] 27(5), pp.1329- 1335. Available at: https://www.healthaffairs.org/doi/full/10.1377/hlthaff.27.5.1329.
Siemens Healthineers (2019). Siemens Healthineers Digital ecosystem. Retrieved from https://www.siemens-healthineers.com/en-us/healthineers-digital-ecosystem/digital-ecosystem
Siwicki, B. (2019). Here are 6 major issues facing healthcare in 2019, according to PwC. Retrieved from https://www.healthcareitnews.com/news/here-are-6-major-issues-facing-healthcare-2019-according-pwc
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Hi Timo,
Thank you for pointing out the key issues in current US healthcare sector. Really nice post! Based on what you mentioned, I also would like to add a few more points. The new digital health ecosystem which gives many different stakeholders access to data may involve the problem of privacy that patients place great emphasis on. Also, doctors might have limited acceptance to the new digital health ecosystems as well as ehealth technology. In addition, we may also take a look at how the application of similar model is going in Nordic countries.