This year's word is “convergence.” The healthcare market is poised for higher levels of cooperation between typical industry players and new market entrants in the name of healthcare consumerism.
At the end of the day, the industry is definitely in need of a transformation, as consumer-centric care is no longer an option. Patient loyalty is unstable. Research shows that healthcare consumers will turn to new healthcare providers to get the healthcare experiences and services they desire.
Most experts agree that healthcare organizations struggling with slim profit margins need to adapt to the forces of medical consumerism to maintain market share.
But it is clear that no one can go it alone.
Incumbent healthcare stakeholders (such as health systems and insurance companies) have realized that the current state of the healthcare industry falls short of consumers' desire for the industry to mirror other service areas; Market entrants weren't so lucky either.
Despite all the pomp and circumstance surrounding companies like Amazon, the tech giant had to shut down its telemedicine business in 2022. Google and Microsoft have also each experienced failures in entering the healthcare market.
In fact, the healthcare market may be on the precipice of something new, according to Kureni Ghebreyesus, MD, vice chairman of Deloitte and a leader in the U.S. life sciences and healthcare industry.
Ghebreyesus predicts a more symbiotic relationship between the two as traditional healthcare organizations strive to meet consumer demand and advanced technology companies navigate the healthcare industry's unique regulatory environment. I'm doing it.
Ultimately, more incumbent healthcare organizations and their big technology companies could succeed where they have so far failed.
The healthcare industry is ready to overturn the existing power paradigm
Ghebreyesus noted that the healthcare industry has been accelerating toward a more consumer-centric model for years, but she and her colleagues at Deloitte think it's finally coming together.
“As we look at the evolution of healthcare and how healthcare organizations are thinking about patients, there is a huge asymmetry of information, and the healthcare system, healthcare provider, or clinician doesn't know what you need. They know more about things than you do, and they know more about your diagnosis than you do,” Ghebreyesus said.
Or so providers think, she added.
The industry is moving away from its paternalistic mindset, first with a call for greater patient engagement and patient-centered care, and now with an increased emphasis on access. Previous Deloitte research has shown that consumers are looking for virtual options to switch doctors or see a doctor more conveniently and cost-effectively.
Faced with slim margins and market pressures, health systems are working to serve patients where and how they want. They accept that traditional health paradigms may not be enough to get there.
“Life sciences and healthcare organizations are realizing, 'We can't do this alone. We need to do it by converging with technology, retail, and hospitality,'” Ghebreyesus said. did.
In 2025, we expect the convergence of consumerism and industry to create new disruptions within healthcare, manifesting in the ability to maintain or grow market share and achieve the profits and margins life sciences and healthcare organizations seek. will be done.
Kulleni Gebreyes, MDVice Chairman, US Life Sciences and Healthcare Industry Leader, Deloitte
“In 2025, we can say that the convergence of consumerism and industry will bring new disruption to the healthcare sector, manifesting itself in the ability to maintain or expand market share and achieve vital profits and margins. We're very happy that this is what scientific and medical institutions want. ”
Life sciences and healthcare companies are working to streamline digital front doors that link virtual visits, online prescriptions, and even prescription delivery. This is not a new idea, even for the giant companies that have come to define the global technology market.
Amazon, Best Buy, Google, and Microsoft have all ventured into the healthcare space in one form or another with varying degrees of success. But in recognition of the sheer complexity of the healthcare industry, not to mention patient loyalty to existing hospital brands, these companies are increasingly recognizing the value of cross-functional collaboration.
Partnership highlights technology and health expertise
Ghebreyesus acknowledged that big tech companies' expansion into the medical field hasn't always been successful. While Best Buy Health is moving forward and Amazon's partnership with One Medical continues to move forward, Google and Microsoft, both in the healthcare business, ultimately failed.
This is not at all surprising given the highly complex regulatory landscape of the healthcare industry.
In fact, every industry has a web of rules and regulations governing them. However, the rules for the healthcare industry are particularly complex, compounded by the public and private nature of the industry.
“When you have a new entrant who doesn’t really know the regulatory restrictions and how much the basic infrastructure will cost to comply with those restrictions, it’s hard for that company to really break the mold. “It's difficult,” Ghebreyesus said. “They have great ideas and great technology, but they are limited by what medicine is limited to.”
Market convergence has already begun. For example, Atrium Health announced a partnership with Best Buy in 2023 to strengthen its hospital-at-home program. In late 2024, Cleveland Clinic and Amazon One Medical announced plans to open a hybrid primary care clinic.
These programs are possible because they are supported by cross-sector partnerships and leverage both technology innovations from leading technology companies and the regulatory expertise of established health and life sciences companies.
“Currently, there is a convergence occurring between incumbents and new entrants, allowing new entrants to disrupt old healthcare models, but without knowing how to meet all regulatory guidelines and restrictions. We are bringing in the expertise of existing companies that we have identified,” Ghebreyesus said. .
“These partnerships and collaborations are working now because you are taking what you need to know and thinking in new ways to actually build sustainable financial models to enable and meet consumer needs. ” she added.
There are still challenges, especially in terms of building patient trust. Patients primarily trust their doctors and health care payers, the incumbents of health care. But will they entrust their healthcare to a brand historically associated with the technology sector?
Mr. Ghebreyesus thinks he might do so, but his confidence will likely depend on word of mouth and the testimonies of all his family and friends.
“When it comes to established healthcare providers and those new to healthcare, while there is some trust in brands that are part of the traditional healthcare system, what appears to be more important is the When someone says, “I've used a medical service,'' and that service has been helpful to me,'' she asserted.
As patient experiences with these cross-cutting options become more common and more satisfying, Ghebreyesus predicted that patient trust in new market entrants will increase. For example, as more people participate in Atrium and Best Buy's home health deals, public awareness is expected to increase as well.
Most cross-sector partnerships are in their infancy, so it's unclear how consumers will actually perceive them and whether they'll be effective. But Ghebreyesus predicted these collaborations will become more common as both big technology companies and established healthcare and life sciences companies seek to maintain their foothold in the market.
“We know that all life sciences and healthcare companies are focused on improving health outcomes and making care experiences and capabilities available to everyone.” she concluded.
“With an increased focus on understanding consumer needs and understanding cross-industry partnerships, the benefits and ability to improve health, reduce costs, and enhance experiences will become more real.” We believe that care should be convenient and affordable for everyone.”
Sarah Heath has been reporting on news related to patient engagement and health equity since 2015.
