We have all heard that innovation is critical to the future of healthcare. Even Apple has got into the game with its Health app and developer kit for medical data collection. There is no bigger sign demonstrating that the healthcare industry is undergoing a digital transformation.
Healthcare is complex. With skyrocketing costs and increasing complexities, customers are more disgruntled than ever before. Recently, a host of technology startups have emerged to come up with new solutions, and in turn, they have pushed established healthcare companies to innovate.
One way that many in the healthcare industry are trying to transform is by going to the experts — their own employees! With crowdsourced innovation technology, organizations are fostering employee engagement to share their ideas to identify new growth opportunities, operational improvements, and new products and services.
Healthcare organizations—be it the biggest healthcare company, UnitedHealth Group, or a mid-sized non-profit such as Cambia Health Solutions—are finding that their employees have the answers to their future.
UnitedHealth Group created a culture of innovation from within by engaging with its base of over 165,000 employees. The product ideas that emerged from this innovation program demonstrate the potential to eliminate $30 million in annual operating costs and dramatically improve patient care, health, and customer experience. Similarly, Cambia launched an innovation program to rethink its entire business, ultimately leading to 10 new provisional patents, $171 million in contributed revenue, and the creation of 5 new companies, including the popular Hubbub.
For a successful outcome in their digital transformation practices, organizations must understand the main factors motivating innovation in healthcare products and services. Based on extensive research, the largest provider of innovation management software, Spigit, has identified these six forces driving healthcare transformation:
- Dissatisfied Consumers
- Increased Cost Sharing
- Skyrocketing Prescription Drug Costs
- Healthcare Complexity
- Access and Digital Transformation
- Healthcare Reform
81% of consumers in the U.S. are dissatisfied with their healthcare experience, according to a study conducted by Prophet and GE Healthcare Camden Group. Rising costs for prescription drugs and long wait times at the doctor's office are just a couple consumer grievances.
Over just the past five years, out-of-pocket medical expenses have doubled for employees. In turn, a 2015 study by PwC found that the number of consumers declining medical care has risen to 40%. And when skeptical consumers turn down medical services, their employers and healthcare companies both take a hit.
A 2013 report from CVS Health estimated that specialty drug costs would quadruple from $87 billion to $420 billion by the year 2020. These skyrocketing costs could ultimately have a domino effect. If consumers can't afford the drugs, they won't buy them, which means facilities won't carry them. At the end of the chain, you have pharmaceutical companies limiting how much they can spend on research and development of new drugs.
43 million Americans have unpaid medical debt on their credit reports, and over half of debt collections are related to medical expenses, according to the Consumer Financial Protection Bureau. Between medical facilities, doctors, insurers, and pharmaceutical companies, healthcare billing quickly gets overly complicated. In many cases, consumers simply don't understand who they owe and for what.
People growing up in the digital age expect convenience. You can hail an Uber, order food for delivery, and book a hotel room all from your smartphone. But the patient experience hasn't caught up with these consumer expectations. In major U.S. cities, for example, the average wait time for an appointment is 18.5 days.
The Affordable Care Act of 2010 marked a turning point in the overall industry by opening the floodgates to a whole host of new technology companies. Since 2010, health technology start-ups have raised $7.65 billion from VC firms. While these new entrants are driving many healthcare companies to rethink and retool their businesses, no one should wait for the threat of disruption to start innovating.
Learn more about the main driving forces of this change and how other health organizations are relying on crowdsourced innovation to meet the needs of patients, doctors and medical service providers. Click here to read and download a free copy of the ebook, The Six Forces of Transformation.
Download the E-Book to read more: The 6 Forces of Healthcare Transformation