Healthcare due for technology 'shake up'
'Within a decade, the health and wellness business will look and feel like other consumer-oriented, technology-enabled industries,' says PwC
With consumers entranced by fast-evolving technologies and accustomed to price competition, healthcare is set to be transformed by innovations from other sectors of the economy such as retail and telecommunications, according to a new study by PwC's Health Research Institute.
In Healthcare's New Entrants: Who will be the industry's Amazon.com?, PwC suggests that "market disruptors" -- new industries, new technologies -- will soon make a big mark on the $2.8 trillion healthcare sector.
These new players are the leading edge of a what PwC calls a "new health economy" -- one that "over the next decade will see today's siloed healthcare industry become a wide open health marketplace," said Kelly Barnes, PwC's U.S. health industries leader, in a press statement.
[See also: Payers embracing consumer technology.]
"To meet looming revenue threats, traditional healthcare companies will have to partner, innovate or can face fading away," she added. "Meanwhile, the nimble and innovative new entrants can benefit from partnerships with existing healthcare organizations, which understand the complex regulatory and reimbursement landscape."
Everybody's getting into the game: HRI research shows half of 2013's Fortune 50 companies are new entrants into healthcare, including seven retailers, eight technology and telecom companies -- and even two automakers.
"As the health sector's center of gravity shifts toward customers, savvy new players are moving fast to capitalize on the change," said Vaughn Kauffman, principal, PwC Health Industries, in a statement.
"These new entrants are poised to shake up the industry, drawing billions of dollars in revenue from traditional healthcare organizations while building lucrative new markets," he added. "Within a decade, the health and wellness business will look and feel like other consumer-oriented, technology-enabled industries -- retail, banking, publishing and music."
An HRI survey points to a $64 billion marketplace in diagnostics, treatments and services that, thanks to consumers' eagerness to seek competitively-priced health solutions from non-traditional sources, is poised for a shakeup.
Survey respondents were presented with a series of common medical treatments, tests and procedures offered in new settings, such as using a kit to test for strep at home, having a digital photo of a rash evaluated by a physician online or having chemotherapy administered at home. Asked how likely they would be to choose each alternative treatment or service if it cost less out of pocket, nearly half of respondents on average chose these new options, according to PwC.
"Soon, healthcare will have its own Amazon.com-style, iconic, new economy brands," said Kauffman.
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