Vitalized by technology-driven advances, yet constrained by complexity, healthcare and the ecosystem of the healthcare industry – pharma, biotech, providers, payers, government – is also changing at an accelerated rate. Regulatory and reporting requirements, patient-centricity expectations, and socio-demographic factors are bringing supply chain, R&D, and sales and marketing challenges to new heights. As a result, healthcare organizations and life science companies alike face constant pressure to reduce costs while continuing to drive innovation.
To address these challenges, companies are adopting and depending upon technology as a critical enabler of business success and healthier populations. Here are some areas where technology will be driving innovation and productivity across the healthcare industry:
Regulatory and government
More and more inernational governments are establishing standards and encouraging data sharing and common tool adoption. A prime example, passed by Congress in December 2016, is the 21st Century Cures Act, which allocates $6.3 billion to fund medical research and allows for more flexible product regulation by the Food and Drug Administration (FDA).1 Among its provisions, the law encourages faster drug and device approvals using real-world evidence, whereby healthcare information from “atypical” sources such as electronic health records, billing databases, and product and disease registries are being leveraged in the FDA’s assessment of product safety and effectiveness.2 In response, life science companies must ensure they have the technology and information management capabilities to adequately meet corresponding governmental reporting requirements. More than half of life sciences companies surveyed for a 2017 benchmarking survey reported having made investments to significantly ramp up capabilities in these types of programs.3
Across healthcare, the focus of influence has shifted from payers, providers and employers to the ultimate consumers of care – the patients — who bear increasing financial responsibility for treatment through higher premiums, deductibles and co-pays. Concurrently, however, patients are enjoying an unprecedented array of choices in sites of care – from retail clinics, urgent care facilities, ambulatory surgery centers and telehealth services, all in addition to traditional primary or specialty practices. Life sciences companies striving to connect directly with their customers — both providers and patients — identify the evolving landscape as a leading industry pressure on how their business currently operates. While the sales and marketing function is at the top of the list for areas where transformative changes is being considered, technology and research functions aren’t far behind.4 The redefined customer will bring significant change throughout the life science industry ecosystem, particularly in how, and by what means, customers can be most effectively reached. Digital health applications, social media, and mobile platforms are increasingly being used to connect with and influence consumers, physicians and patients. Benefits of such engagement include being able respond rapidly to a brand reputation crisis, interacting directly with customers and cultivating brand advocates, gathering insights into preferred treatments, and offering opportunities for self-service.5
Big data and analytics
The healthcare analytics market is projected to expand from a global value of $7.4 billion in 2016 to $24.6 billion by 2021 — a compound annual growth rate of 27 percent.6 On a macro level, this projected growth is due to widespread value-based care initiatives aimed at cutting costs while improving outcomes. Additionally, core technological advancements now enable data analysis capabilities that would have seemed impossible just a few years ago. Tech giants such as IBM, SAS and Oracle have entered the healthcare analytics space along with industry-specific firms such as Cerner, McKesson and Optum. In order to provide real-time insights to drive R&D and commercial priorities, life science firms and health systems are committing to large-scale technology investments that facilitate the combination of internal data with real-world data originating in external environments.
Adoption of common platforms
To drive down costs and re-engineer operational models, life science companies are increasingly migrating disparate supply chain, commercial, and financial systems into common enterprise platforms such as SAP and Oracle. While there are clear benefits to these enterprise-level technology platforms, including visibility into supply chain, product development and marketing processes, these initiatives are large, complex and can be disruptive to the organization. Hospitals and health systems both have similar concerns, but also need to optimize day-to-day clinical operations. A non-proprietary international standard known as Fast Healthcare Interoperability Resources (FHIR) is quickly becoming the essential means of achieving plug-and-play data exchange. FHIR can be used to import clinical, claims and EHR data from a common interface, setting up further analysis of patient groups by geography, age, condition or even specific treatment code.7
Turning Opportunity Into Success
Healthcare and life science companies regularly struggle to balance industry-wide pressures with opportunities elevated by technology-driven innovation. Cost control and compliance issues both weigh against the prospect of expanding business in emerging markets such as digital health and personalized medicine. In order for companies to thrive and innovate by leveraging technology, they will need to consider the following critical success factors:
- Business strategy and shared leadership. Technology-driven innovation must be linked to and aligned with business strategy. There should be a clear relationship as to how technology and innovation efforts will enable execution of the company’s strategy and its ability to effectively compete — and ultimately thrive — in the marketplace. Classic, top-down management leadership style will not work in this new landscape — only a sense of shared leadership will successfully enable innovation. Team members don’t want to merely follow directives, they want a sense of creating and contributing to future opportunities in concert with upper management.
- Cross-functional collaboration. While information technology (IT) is expected to support the needs of healthcare and life sciences businesses, technology-driven innovation cannot be sourced solely from IT. It is critical that innovation efforts come together through cross-functional collaboration. Recent research shows that one of the key barriers to transformation is lack of cross-functional engagement.8 Whether the innovation is in sales and marketing, regulatory, or R&D, cross-functional teaming and diversity of ideas are key. Most companies are organized functionally, which can make cross-functional collaboration a challenge. It is critical to have shared goals and a culture that promotes collaboration.
- Change management and communication. Initiatives to improve performance may require new approaches, strategies, business processes, organizational roles and technologies. Accordingly, adoption of innovative technologies and new ways of working cannot happen without strong change management and communication. Aside from the previously noted cross-functional collaboration, organizational engagement — in terms of buy-in and understanding what will happen — is also an essential element of managing change. Companies should be able to assess readiness of all stakeholders and implement plans to ensure their participation. Regular communications will help make sure that stakeholders are engaged and knowledgeable.
Whether addressing top-level areas such as customer engagement, cost control, or regulatory and risk management, healthcare executives are putting technology to work in increasingly innovative ways. Those who properly prepare for and execute on transformational change can expect to gain a sustainable advantage over their competitors.
1. Fox M. “Senate Passes Sweeping 21st Century Cures Act Funding Medicine.” NBC News. Dec. 7, 2016.
2. Sherman R et al. “Real-World Evidence — What is It and What Can It Tell Us?” New England Journal of Medicine. Dec. 8, 2016.
3. “Getting Real With Real-World Evidence.” Deloitte. Accessed June 8, 2017.
4. “Annual Survey on Business Transformation in the Life Sciences.” TayganPoint Consulting Group/ PharmaVoice. Accessed June 8, 2017.
5. Brueckner A. “How Can Life Sciences Companies Take Advantage of Social Media Monitoring?” Accenture Life Sciences Blog. March 2, 2015.
6. “Healthcare Analytics Market Worth 24.55 Billion USD by 2021.” Markets and Markets. Accessed June 8, 2017.
7. McPherron A. “FHIR: Advancing Healthcare’s Epic Interoperability Storyline.” Transcend Insights Blog. May 4, 2017.
8. “Annual Survey on Business Transformation in the Life Sciences.” TayganPoint Consulting Group/ PharmaVoice. Accessed June 8, 2017.
John Cassimatis is president and co-founder of TayganPoint Consulting Group, where he assists global companies with major organizational transformations. He can be reached at email@example.com.
This article was originally published in Healthcare Innovation News.