The year 2016 will go down in history as the breakthrough year for technology in the healthcare industry. Technology trends, disruptive as ever, clearly outpaced others including geographical, social, and political trends in shaping the industry’s current and future business course. Conservative as it is, the experience has been unsettling for healthcare industry’s stakeholders as they grapple to make business sense out of newer realities. What just happened?
Call it ‘technology storms’ or the ‘third wave of internet’ or just the ‘third platform’, the emergence of SMAC technologies has triggered disruption bordering on chaos; unnerving several industries including healthcare with the potential to ‘connect’ just about everything. First, unimaginable miniaturization with falling silicon prices commoditizes ‘electronics’ to the point of cereal-grain-like-production of the Industrial age. Then, mobile, wireless and sensor technologies such as the Internet of Things (IoT) and Machine to Machine (M2M) push connectedness from industrial to consumer space. As a result, the eco-system now pivots around an empowered consumer1 – one who is influenced by social-media strategies from other domains such as Uber and Netflix. Even computing paradigms and processing power migrates from desktop to both frontend BYOD devices (smartphones as diagnostic tools) and backend racks, thanks to cloud computing. Finally, the enormous possibility of 7 billion consumers interacting with 10 billion devices in settings never seen before, starts to scare every stakeholder in the eco-system. It doesn’t stop there, as the resulting exponential Big Data spawns new interpreting technologies like distributed processing (Hadoop), Analytics and Deep/Machine Learning – all trying to gain a foothold in the industry. These disruptive technologies have also neutralized market leaders’ edge viz.a.viz startups, especially on newer segments such as coordinated community care, artificial intelligence (AI) in decision support, customized 3D printed implants, digestible sensors, gamification and analytics based wellness, and microchips based clinical trials. We are even seeing government sponsored initiatives in personalized and precision care namely, the Precision Medicine Initiative by the US President.
Game Changers for an Evolving Healthcare Industry
Amidst the technology mayhem, two aspects to have clearly emerged as game changers within healthcare are – (1) unprecedented connectedness, thanks to M2M, C2M, and C2C technologies and (2) consumer-centricity, heralding the convergence of medical devices and care with consumer technology and connectivity. The impact has been phenomenal with the term ‘care’ now taking on several adjectives such as virtual, smart, informed, precision, and personalized. Add to that, political and legislative changes for example, Affordable Care Act (ACA) conceiving ‘accountable’ metrics-driven value-based care delivery workflows, unprecedented M&As and realignments on business front, new standards and regulatory guidelines on interoperability and cyber security, and re-evaluation of fundamental design and development approaches themselves (such as model-based-design, cyber-physical systems in embedded software systems and SaMD, Software as Medical Device).Clearly, we are seeing two levels of disruption at work:
However, we do sense a general reluctance of the industry at large towards adoption of new technologies. Perhaps the biggest challenge has been the industry’s conservative approach itself – fears of potential health hazards and personal data breach – in evaluating how new technologies can synergize into newer models of care continuum and better workflows. The wide spectrum of therapeutic disciplines with their varying medical technologies, diverse protocols, and lack of interoperability standards in communication and data representation have always created islands of dominance and resisted integration in the past. However, with large scale disruption becoming imminent, it will be interesting to see how every stakeholder though reluctantly re-defines themselves with their own digital, IoT, analytics, cloud, and mobile strategies ad nauseam.
Re-defining the Healthcare Business Model with ‘Value’ at its Core
On deeper introspection, while the digital disruption seems to be the healthcare industry’s tipping point, the healthcare business model has been in need of change for long. Though modern medicine has improved the quality of life, with life expectancy of children increasing by 7 years in last 25 years alone2, the underlying business model had turned unsustainable long before. According to WHO, global healthcare spending has exceeded global GDP growth by 2% for the last 20 years. And it shows no signs of abatement with the increasing percentage of aging population, incidents of chronic diseases, and cost of care. All stakeholders including governments have been pressurized for reforms to bring accountability, reduce inefficiencies, and improve access and quality of healthcare. The increased cost in care delivery and operational maintenance has forced a change in approach from diagnostic to preventive, resulting in increased monitoring and analytics.
With the healthcare business model itself turning ‘value-based’, accountability has driven all stakeholders to redefine their ‘value’ within the care continuum by collaborating beyond their core offerings. The fallout has been beyond expectations – 2016 has been nothing short of the year of merger mania.3 We are starting to see unusual affiliations as cash-rich entities de-risk and spread their market reach beyond traditional portfolios (like pharmaceutical companies buying ‘beyond-the pill’ products/services and tech-giants acquiring every cloud or analytic startup to bootstrap to third platform technologies). Even associations like the American College of Radiology have redefined workflows recommending radiologist-focused framework titled Imaging 3.0. In fact, we have come to realize that, besides expectations, even consumers’ fears can drive priorities. PwC studies indicate 40% of consumers would shun a HCO if hacked and 50% would be wary of a breached ‘connected’ device, thus substantiating the inevitability of cybersecurity.4
The Future of Healthcare: Where to Place Your Digital Bets?
Currently we see every prominent thought leader taking a shot at digital healthcare. Recently, the World Economic Forum announced its guidance, identifying prominent digital themes and initiatives on digital transformation of healthcare.5 The setting will continue to confuse the community as stakeholders re-position themselves with their own versions of silver bullet. Hence, it makes sense for product companies and service providers to reassess where the confluence of technologies, regulations, and open standards are headed even if they might already have their (third platform based) solutions in place. In this context, FDA’s demarcation of Digital Health’s area of influence has been practical and rooted in the present. The agency has earmarked nine key areas where the thrust should be, for both product and services players to invest and align.6 FDA has acknowledged that mobile and wireless technologies will become synonymous with care, new models for design and development to address the migration from mechatronics to electro-embedded systems are needed (SaMD and Medical Device Data Systems), and caution against changing challenges in security and interoperability is the need of the hour. It is also interesting to note how FDA’s recommendations have refrained from the ‘futuristic’ and stuck to practical aspects relevant to both nascent and traditional segments in healthcare. Equally interesting has been EU’s latest version (June 2016) of Medical Device Regulation (MDR) acknowledgement of ‘software’ as an active medical device, classified in its own right. Digital Healthcare has truly arrived.
[1] http://healthstandards.com/blog/2015/01/28/future-of-medicine-is-in-your-hands/
[2] Global Health and Aging – World Health Organization, http://www.who.int/ageing/publications/global_health.pdf
[3] Top Health Industry Trends and Issues 2016: PwC, www.pwc.com/us/en/health-industries/top-health-industry-issues.html
[4] Cyber security: Top Health Issues 2016: PwC, http://www.pwc.com/us/en/health-industries/top-health-industry-issues.html
[5] Digital Transformation of Industries: Reports: World Economic Forum, http://reports.weforum.org/digital-transformation-of-industries/
[6] Digital Health – FDA, http://www.fda.gov/ › Medical Devices › Digital Health
Author
Rajkin G
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