KEY POINTS

  • Digital disruption is rocking the healthcare industry, and key stakeholders — payers, providers, manufacturers, and medical supplies distributors — are all feeling its effects differently. Until now, healthcare was the only remaining industry that had yet to feel the rapid impact of digitization endured by retail, banking, and media. However, consumer adoption of digital tech, regulatory overhauls, and a shifting reimbursement model are forcing healthcare players' hands.
  • Consumers are seizing more control over the way healthcare is accessed and delivered, upsetting the status quo and threatening incumbents' top lines. The growing prevalence of wearables, mobile health (mHealth) apps, and online reviews, for instance, is beginning to take its toll on the market, incentivizing a necessary transformation in the way many healthcare organizations operate.
  • Incumbents that take advantage of the shifting landscape are well positioned to see top-line growth, better customer engagement, and more favorable market positioning. To keep ahead in high-growth areas, incumbent healthcare players are rapidly building, buying, and partnering with other firms. This battle is playing out across each of the major healthcare industries detailed in this report.
  • Payers are seeing a massive opportunity in digital health to improve customer engagement and risk assessment, and reduce unnecessary medical procedures. Wearable technology, such as Fitbits and Apple Watches, allows insurers to engage with their customers through personalized push notifications, while the devices' continuous monitoring capabilities enable more accurate risk assessment.
  • Innovation is presenting health systems — including hospitals, clinics, and post-acute care facilities — with solutions to labor shortages and shrinking revenue. By 2025, US providers will face a collective shortage of about 450,000 home health aides, 100,000 nursing assistants, and 29,000 nurse practitioners, Mercer estimates.
    • Telehealth can reduce the strain labor shortages are having on health systems by minimizing in-person visits for nonemergency patients, freeing up time in triage, and creating more space for serious and urgent illnesses.
    • Artificial intelligence (AI) and cloud services could increase health systems' revenue potential by providing data-driven clinical decision support (CDS) to physicians and hospital staff, reducing the use of unnecessary procedures to improve clinical patient flow and care outcomes. This could also help ensure health systems receive their reimbursement under the new value-based care (VBC) system.
  • Drug and medical device makers are turning to digital tech to navigate the market-wide shift [...]