Blur­ring the Lines: Pre­par­ing for Con­ver­gence in Health and Life Sciences

Rotman Management Magazine - - NEWS - by Kais Lakhdar, Ge­orgina Black and Will Mitchell

Mas­sive op­por­tu­ni­ties ex­ist to lead the trans­for­ma­tion of the global health­care mar­ket and cre­ate value for stake­hold­ers through­out the sys­tem.

Mas­sive op­por­tu­ni­ties ex­ist to lead the trans­for­ma­tion of the global health­care mar­ket­place.

for health­care ser­vices TO­DAY, BOTH PUB­LIC AND PRI­VATE PAY­ERS through­out the world are im­pos­ing strong de­mands for ef­fi­cien­cies. At the same time, un­con­ven­tional com­pe­ti­tion is aris­ing from newly-con­verg­ing tech­nolo­gies and ser­vices, cre­at­ing a plat­form for trans­for­ma­tive change in health­care qual­ity and ac­cess.

This dis­rup­tion is chal­leng­ing ex­ist­ing ac­tors in the health­care sec­tor while at the same time, cre­at­ing op­por­tu­ni­ties to de­sign stronger sys­tems. Per­haps more than ever, com­mer­cial play­ers are at the cen­tre of the op­por­tu­nity to achieve a stronger bal­ance of qual­ity, cost and ac­cess to health­care ser­vices.

The core de­mand is straight­for­ward, if dif­fi­cult to ac­com­plish: com­pa­nies across the health and life sciences sec­tor need to re­align their goals with the chang­ing na­ture of the health sys­tem, while iden­ti­fy­ing prof­itable op­por­tu­ni­ties to lead col­lab­o­ra­tive ef­forts with sys­tem stake­hold­ers. Tra­di­tional life sciences com­pa­nies — in­clud­ing phar­ma­ceu­ti­cal, med­i­cal de­vice, phar­macy, and di­ag­nos­tic health ser­vice providers — as well as non-tra­di­tional play­ers such as re­tail, tech­nol­ogy, telecom­mu­ni­ca­tions and el­der-care providers are al­ready be­gin­ning to en­gage in the rev­o­lu­tion.

In this ar­ti­cle we will show­case ex­am­ples of health-sec­tor con­ver­gence and out­line the key ques­tions for-profit or­ga­ni­za­tions need to ad­dress as they seek suc­cess in this emerg­ing land­scape.

The Driv­ers of Change

In the cur­rent en­vi­ron­ment, three sets of mar­ket and tech­no­log­i­cal forces are re­shap­ing how health­care is man­aged, de­liv­ered and ex­pe­ri­enced. 1. SHIFT­ING DE­MO­GRAPH­ICS, UN­CER­TAIN ECO­NOMIC GROWTH AND

Every tra­di­tional de­vel­oped mar­ket VALUE-BASED PAY­MENTS. in the world faces the chal­lenges posed by an ag­ing pop­u­la­tion. In Canada, for in­stance, the pop­u­la­tion over age 65 now out­num­bers youths un­der age 15, and by 2036, the pop­u­la­tion of those older than 65 will more than dou­ble. This shift to­wards a pop­u­la­tion with high needs for health­care ser­vices, com­bined with only mod­er­ate long-term eco­nomic growth prospects, sug­gests that to­day’s era of fis­cal cau­tion is here to stay. Faced with grow­ing de­mands for care, health­care pay­ers are in­creas­ingly fo­cus­ing on out­comes, while align­ing re­im­burse­ment to value-based pric­ing mod­els. Par­tic­i­pat­ing or­ga­ni­za­tions need to re­shape their pric­ing and ser­vice mod­els ac­cord­ingly — or face fail­ure.

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