Kulleni Gebreyes, MD, Vice Chairman, Deloitte and a leader in the U.S. life sciences and healthcare industry
Nearly one in four consumers believe they don't have access to quality care, and nearly half have skipped care in the past year, according to a new study from Deloitte. 1 Many healthcare consumers are accustomed to gaps in care. In some cases, it has become common to wait up to a month to see a doctor.2 Cost considerations may prevent some people from purchasing medical equipment to monitor chronic conditions. Some people may forego prescription drugs because they can't afford them or can't go to a pharmacy.3
Some innovative life sciences and healthcare (LSHC) organizations are working to close these gaps in care through strategic cross-industry collaborations and convergence between different sectors and industries. Incumbent LSHC organizations that fail to take advantage of the growing wave of consumerism and convergence risk losing market share and margins. As Deloitte's new national leader for U.S. Life Sciences and Healthcare, I want to build bridges that connect our existing organizations with each other and external industries, communities, and people.
Healthcare consumers are more than just patients and enrollees
We live in a rapidly changing world that often disrupts traditional ways of thinking. A few years ago, my colleague Neil Batra and I met with a group of physicians and health system executives. When Neil started talking about the expanding role of the empowered healthcare consumer, a doctor interrupted him. He did not like patients to be called “consumers.” When I was an emergency physician, I would have agreed with that statement. Doctors are experts in telling patients what they need to do to get better. But people have come to understand that they are more than just patients in the hospital. They are more than just health insurance subscribers. They are more than just users of medical devices and prescription drugs. We are all human beings who need healthcare services, medical equipment, and medicines from time to time.
Consumers are looking beyond traditional care models and distribution channels to meet their needs and appear to be driving change in the life sciences and healthcare space. According to results from Deloitte's 2024 U.S. Healthcare Consumer Survey, approximately one in four (24%) consumers are willing to change their doctor if a virtual visit option is not offered. ). Additionally, nearly all respondents who have tried a virtual visit say they would like to visit again. Some consumers turn to compounding pharmacies during drug shortages, to look for lower-cost options, or to avoid purchasing new medical equipment or reduce costs. , and finding ways to reprogram, reuse, and reconnect certain medical devices.5. In response, several pharmaceutical and medical device manufacturers have begun selling their products directly to consumers.
As convenient, affordable, and consumer-focused products and services become more prevalent, established life sciences and healthcare organizations may lose profits if they fail to meet consumers where they are. In 2025, incumbent organizations will pay even closer attention to evolving consumer preferences and expectations. This could help foster convergence between life sciences and healthcare organizations as innovative companies seek to close gaps in care. Results from our 2025 Life Sciences and Healthcare Outlook study show that more than half (54%) of executives are committed to strategic cross-industry collaboration and convergence between different sectors and industries. I agree that it is important.
Convergence could cause industry disruption
In every industry, established organizations tend to rely on established business models and processes. But improving these models or making processes more efficient tends not to change the consumer experience. Industry disruption, often driven by fragmentation, friction, and the need for more affordable options, has historically occurred despite existing business models and processes.
Startups and organizations outside of life sciences and healthcare are working to bridge the gap between consumer preferences and existing products and services. According to a Deloitte analysis of the Global Wellness Institute's 2022 report, private equity firms invested approximately $87 billion in healthcare startups between 2021 and 20246. During the same period, consumers spent nearly $550 billion on nontraditional health care products and services.
Market opportunities that fill gaps in consumer needs could drive convergence in 2025. More start-ups are likely to enter the space, and established organizations may develop new products and services to meet changing consumer preferences. Virtual health, artificial intelligence (AI), fitness trackers, and wearable devices appear to be driving disruption in this sector, according to Deloitte's 2024 Healthcare Consumer Survey. As a result, convergence could become a major trend for life sciences and healthcare companies in 2025. However, today's collaborators and partnerships can become tomorrow's competitors (see Medtech's Digital Innovation Era).
Consumers can be a catalyst for change
Our research shows that life sciences and healthcare organizations are beginning to pay close attention to consumer needs, goals, and expectations. Historically, getting a prescription or accessing medical equipment almost always required seeing a doctor and then going to a pharmacy. But as consumers become more comfortable purchasing clothing, cosmetics, and groceries online, and doing their banking online, they begin to expect similar convenience from prescription drugs and medical devices. Possibly. Consider the following example of how consumer preferences are impacting the life sciences and healthcare sector.
Healthcare convergence: Last July, Humana's Centerwell division announced it would lease clinical space in retail stores in four states. The clinic, scheduled to open next summer, will provide primary care services for seniors.7 In 2023, Atrium Health (part of Advocate Health) will strengthen its home hospital program. announced that it has partnered with Best Buy. Under the deal, the electronics retailer will establish monitoring technology to help patients understand how to operate digital medical devices. 8 Direct-to-consumer (DTC) sales in life sciences: DTC drug sales have been around for several years. However, the rapidly expanding digital sales environment and increasing adoption of virtual health could see DTC surpass pharmaceutical sales by 2025. 9 Earlier this year, Lilly announced a portal that allows patients to purchase certain drugs directly from manufacturers. 10 Consumers can connect to an online pharmacist to have medications delivered directly to their home. A few months later, Pfizer launched the PfizerForAll portal, where people suffering from migraines and other conditions can schedule virtual visits with a doctor, discuss treatment options and have their medication delivered. 11 On the medical device side, glucose manufacturer Dexcom recently launched an over-the-counter continuous glucose monitor that can be purchased without a prescription. This device is intended for consumers who do not take insulin12.
Women's health can be an opportunity for growth
Women's health is another area where consumers seem to be pushing back against the status quo. We're seeing changes in consumer products as well as research and development…and they seem to be gaining momentum (see Why U.S. Women Skip or Delay Healthcare). Life science and healthcare leaders must evaluate existing care models that are tied to a one-size-fits-all model based on historical data from male subjects. More than 60% of companies focused on women's health were founded in the six years to 202213. Over the past decade, the number of companies in this sector has increased by 1,000%14. Additionally, some companies are coming in from outside. Companies in the life sciences and healthcare sectors are starting to focus on women's health (see Women's Health Investment Trends). Additionally, some employers are challenging health insurance plans to develop coverage options that address the specific health needs of their female employees.
conclusion
The life sciences and healthcare fields have long focused on improving health outcomes, experiences, and reducing system and consumer costs. Although progress has been made, the data suggests there is more work to be done. To get there, healthcare organizations must also look for opportunities to respond to changing consumer preferences and needs by helping make care convenient and affordable for everyone. In the year ahead, more consumers are likely to expect more from the industry, which may prompt some organizations to think outside the box. Some of the most innovative consumer-focused solutions can emerge through collaborations and relationships with organizations operating outside of life sciences and healthcare. Industry leaders need to be bold, demonstrate leadership, and grow businesses that respond to consumer moments.
Acknowledgment
We would like to thank Dr. Jay Butt, Managing Director, Deloitte Health Equity Institute and Deloitte Health Solutions Center, and Andy Davis, Deloitte Consulting Principal, for their analysis and recommendations. We would like to thank the Deloitte Center for Health Solutions team, including Wendy Gerhardt, Richa Malhotra, Madhushree Wagh, Maulesh Shukla, Leslie Korenda, Hemnabh Varia, and Christine Chang, for their efforts in managing, researching, analyzing, and interpreting multiple solutions. . Insights included in outlook. We would also like to thank Brian Rush and Chris Kottenstette for their actuarial analysis of consumer spending trends in health care.
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Endnotes
1Deloitte 2024 Healthcare Consumer Survey
2In the United States, wait times to see a doctor can be painfully long, Society of Healthcare Journalists, August 7, 2024
3CDC: 9 million Americans are not taking their medications due to cost and health concerns, May 18, 2024
4FDA issues emergency compounding guidance to address drug shortages, Association of Regulatory Affairs Professionals, October 14, 2024
5Does DIY still exist in diabetes treatment?, STAT+, June 24, 2023
6 Deloitte analysis of Pitchbook data
7Humana Introduces CenterWell, Humana Press Release, March 16, 2021. Humana's CenterWell opens 23 clinics in Walmart stores, Fierce Healthcare, July 24, 2024
8Atrium Health and Best Buy Health Partner to Improve the Experience When Receiving Home Care, Atrium Health Press Release, March 7, 2023
9Pharmaceutical companies embrace direct-to-consumer sales, Forbes, September 16, 2024
10Lilly Launches End-to-End Digital Healthcare Experience, Lilly Press Release, January 4, 2024
11Pfizer Launches PfizerForAll™, a Digital Platform to Help Simplify Access to Healthcare, Pfizer Press Release, August 27, 2024
12Dexcom Introduces First Over-the-Counter Glucose Biosensor in the U.S., Dexcom Press Release, August 26, 2024
13 Technology Subsection Will Be Worth $1 Trillion, CNBC, June 12, 2023
14 Same as above
This publication contains general information only and Deloitte does not provide accounting, business, financial, investment, legal, tax, or other professional advice or services by means of this publication. . This publication is not a substitute for such professional advice or services, and should not be used as the basis for any decisions or actions that may affect your business. You should consult a qualified professional advisor before making any decisions or taking any actions that may affect your business.
Deloitte is not responsible for any loss suffered by anyone relying on this publication.
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