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

Today’s presenters from PwC Vaughn Kauffman Trine Tsouderos Health Industries Global New Director, PwC Health Entrants Leader Research Institute PwC 2

A New Health Economy is emerging  New economic principles are  Altered funds flow beginning to prevail.  New care delivery  Value will become the models driver of success, rather than volume.  Realignment of existing players  Demographic and socioeconomic  Disruption by changes are creating a new entrants new role for empowered consumers. Health Research Institute PwC Slide 3

Healthcare is following in the footsteps of other industries Industry Past Present Limited bank hours and ATMs and mobile Banking locations banking available 24/7 1980s Limited travel agency hours Online booking with real Travel – and locations time pricing 2010s Customized web-site Standardized marketing and Retail with targeted, data- inventory driven promotions Industry Present Future Personalization of Limited office hours and Health treatment and protocols locations Services On- On-demand services Standardized treatment plans going available shift Personalized medicines Pharma Blockbuster drug model with a focus on outcomes Health Research Institute PwC Slide 4

Nearly half of Fortune 50 companies are new entrants Examples: Wal-Mart Apple Ford Motor AT&T CVS Caremark Verizon Target Walgreen Co. PepsiCo Comcast Amazon.com Health Research Institute PwC Slide 5

How open are consumers to new entrant offerings? Check for an ear infection at home In late 2013, PwC’s HRI using a device attached to a phone sought to gauge consumer Have a wound or readiness for new entrants pressure sore treated offerings and estimate their at a clinic in a retail store or pharmacy impact on traditional provider Get an MRI at a revenues. clinic in a retail store or a pharmacy PwC’s HRI surveyed 1,000 US adults on perceptions of Have chemotherapy at home healthcare and comfort with options being developed by new entrants. Have a pacemaker or defibrillator checked at home by your physician Health Research Institute PwC Slide 6

Consumers are ready to abandon traditional care models for more digital, do-it-yourself options Percent of respondents answering “Very likely” and “Somewhat likely” to consider these alternatives: Ah 46.9% 54.8% 58.6% Check for ear infection Evaluation of minor Use an at-home using device attached skin conditions strep test to phone Source: HRI consumer survey, 2013 and 2011 Health Research Institute PwC Slide 7

Even when it comes to more intensive services, consumers are open to new options Percent of respondents answering “Very likely” and “Somewhat likely” to consider these alternatives: 42.6% 36.7% 34.4% Have a pacemake r or Have at-home Get an MRI at a retail clinic or defibrillator checked wirelessly chemotherapy pharmacy by a physician Source: HRI consumer survey, 2013 and 2011 Health Research Institute PwC Slide 8

Consumers’ desires for new options puts at least $64 billion into play, with more to come $11.6b for MRI $2.9b without contrast $42.1 b for routine ECG for office and $1.9b for at outpatient clinic visits home kidney $694m for treatment $3.3b for Urinalysis by dipstick chemotherapy or tablet reagent administration $358m for $796m for $110m for evaluation of debridement pacemaker contact dermatitis evaluation and other minor rashes HRI analysis, 2011 Truven Databases PwC Slide 9

It’s not just tech -savvy millennials who want something new Middle-aged consumers, caring for their kids, themselves and perhaps their parents, are most open to new, affordable, convenient digital, DIY, home-oriented options. Health Research Institute PwC Slide 10

Consumers are ready to receive care in new ways, in new places  82% of survey respondents said they were open to trying new, non- traditional ways of seeking medical attention or treatment. Health Research Institute PwC Slide 11

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: 9.7% In 2013 , proportion of HRI survey respondents who had visited a retail clinic in the last 12 months: 35% Health Research Institute PwC Slide 12

Consumers want to shop for care in the same way they shop for books, music, hotel rooms and plane tickets Health Research Institute PwC Slide 13

New entrants already are creating technologies to meet consumers’ healthcare needs and desires Health Research Institute PwC Slide 14

HRI estimates Americans spent an additional $267 billion on health-related goods and services in 2012 $59.20B for sporting goods Americans spent $2.8 trillion on healthcare in $93.62B for nutrition 2012, an oft-cited figure that ignores the lucrative $11.25B for fitness and wellness alternative industry. healthcare HRI estimates the nation $61.6B for weight spent another loss $267 billion $40.33B in 2012 on the fitness and for fitness wellness market. $1.30B for mobile health apps Health Research Institute PwC Slide 15

A New Health Economy will emerge over the next decade Strategic Capabilities 10 years Digital Two way Consumer Engagement Presence communication New sources, but Data driven consumer Data fragmented behavior changes Pilots and business Knitted into the core Innovation model simulations business Regulation Compliance Experimentation Fully compliant Business Model / Fee-for-service; Value-based; Payment B2B2C B2B2C2B Hospital / Physician Consumer / Patient Care Delivery centric centric Health Research Institute PwC Slide 16

New entrants and traditional healthcare companies will need new strategies 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. Health Research Institute PwC Slide 17

Questions? Health Research Institute PwC Slide 18

For more information  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 PwC Slide 19