Healthcare, like so many other industries these days, is being democratised. According to Vaughn Kauffman, a principal with PwC's health industries advisory practice in Cleveland, Ohio and Trine Tsouderos, a director of PwC's Health Research Institute (HRI) in Chicago writing in a Strategy-Business report, a survey published in April 2014 by PwC's HRI found that many consumers are willing to abandon traditional care venues for more affordable and convenient alternatives. Nearly one in two survey respondents said they would choose at-home or retail options for more than a dozen medical conditions or procedures such as self-diagnosing strep throat or administering chemotherapy. Kits already exist that enable people to test themselves for HIV.
Respondents between the ages of 35 and 54 were very likely to opt for these types of affordable alternatives, as were those who indicated that their healthcare expenses had put a strain on family finances. And, Kauffman and Tsouderos note, as individuals are required to foot more of the bill for medical care through high-deductible or cost-sharing health plans, insurance exchanges, the popularity of these options will only rise.
They say that within a decade, the health business will look and feel much more like other consumer-oriented, technology-enabled industries. It will have its own Amazon-style, iconic brands – companies that give consumers an easy way to access information, doctors, and treatments; provide them with a variety of services and products at a variety of prices; and centralise their care through user-friendly interfaces. And thanks to this growing trend, plenty of entrants into the market would like nothing better than to upend the old model of care, empowering consumers while taking some of the industry’s annual $2.9trn market for themselves.
These new players will further propel the democratisation and decentralisation of the healthcare industry. Incumbents such as established pharmaceutical companies and health insurance firms, in turn, will face critical decisions. How should they compete with emerging players? Should they forgo competition and instead partner with them? This much is clear: Incumbents cannot continue to do business as usual.
Kauffman and Tsouderos note that perhaps the biggest challenge in this transformation of the healthcare industry is that the digital world has trained consumers to believe they don’t need to pay much for many online services, such as content and social media. They says companies old and new will need to be creative in designing business models that draw people to pay for value. And ultimately, the consumer wins in this scenario – with the emergence of a marketplace filled with more, better, and cheaper options.
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[link url="http://www.pwc.com/gx/en/healthcare/publications/new-entrants.jhtml"]PwC research[/link]