|Empowering the new healthcare ecosystem
By Pradep Nair
|The new era of health IT reflects a systems-thinking view of an industry where the walls separating stakeholders are steadily crumbling; where new business models of co-existence and co-development are rapidly becoming the norm. Convergence will be king.|
The next generation of information technology is sparking innovation across the healthcare value chain.
Tighter finances and thinning margins have made cost cutting and operational efficiency a top priority and fueled innovation, with stakeholders ranging from hospitals and insurance companies to drug companies and pharmacies learning to exploit “health IT” to become leaner and more agile without compromising patient care.
Health IT is quickly turning into a competitive differentiator, helping healthcare organizations deliver more personalized services and rich health-information resources.
In the U.S., the convergence of medical advances, technology innovations and policy shifts are rewriting the rules of a $2.5 trillion industry that makes up an astonishing 17.3% of the nation’s economy.
The new healthcare ecosystem
Stakeholders will need to prepare for a world of escalating complexity and volatility. Navigating this new environment won’t be easy. It will call for flexible strategies, smart investments in technology and strategic partnerships to help stakeholders thrive in the new healthcare ecosystem.
Who are the stakeholders in the new healthcare ecosystem? The ecosystem begins with the patient – the first “P” in what we call the “6 Ps” of healthcare, as shown in the figure below.
The rest of the ecosystem is populated by the following key stakeholders:
- Providers: doctors, nurses, therapists, hospitals, physician groups, clinics and other medical professionals and organizations that provide medical care to patients.
- Payers: health insurance companies that cover the cost of medical care, as well as businesses, organizations and individuals who either directly pay for care or pay for insurance coverage.
- Pharmaceutical companies: makers of drugs prescribed by doctors and healthcare providers; pharmaceutical companies sell approximately $300 billion in products in the U.S. and $650 billion worldwide.
- Pharmacies: a sometimes overlooked player in the healthcare ecosystem, pharmacies represent a $277 billion industry (confirmed in the report “2010-11 Economic Report on Retail and Specialty Pharmacies” by PEMBROKE CONSULTING) in the U.S., often providing critical guidance to patients.
- Policymakers: government agencies and industry organizations that set healthcare policy, write and enforce regulations, and oversee industry standards.
Unique roles, shared interests
In the past, these stakeholders occupied distinct niches in the overall healthcare ecosystem. Their roles were completely clear, in part because interfaces between stakeholders were either weak or non-existent.
The new paradigm reflects a systems-thinking view of an industry where the walls separating stakeholders are steadily crumbling; where new business models of co-existence and co-development are rapidly becoming the norm. That’s partly due to new government regulations that have opened up vast flows of information between patients, providers and payers – and throughout the ecosystem.
All of this is partly the result of runaway medical costs, which have spurred the entire complex to live within its means. This priority demands more collaboration, more information sharing, more interoperability and more integration. In this new era, we see stakeholders coalescing around a common goal: delivering better care, to more people, at a reasonable cost. Information technologies, services and solutions will play a central role in this value-creation process.
The technology edge
Information technology has been transforming healthcare organizations for more than a decade, albeit in low-profile venues like hospital back offices, where enterprise resource planning (ERP) systems have been installed to automate billing and other revenue-cycle functions. Today, healthcare organizations large and small are equipping themselves with enterprise systems and solutions to optimize tasks ranging from claims processing and patient admissions to workforce management and regulatory compliance. Pharmaceutical companies, meanwhile, are investing heavily in IT to speed drug development and testing programs.
Among other initiatives, strategic outsourcing and selected business-process partnerships are generating immense value to healthcare stakeholders, translating into billions of dollars in bottom-line savings across the industry. The move is letting healthcare organizations spend less on tasks that fall outside their core competency and transfer more resources to areas that matter most, such as clinical care, scientific research and healthcare education.
Beyond the administrative streamlining, health IT has now moved to the forefront of medical best practice, giving providers the knowledge and tools to head off disease before it strikes, while empowering patients with the resources to take charge of their healthcare and make smarter decisions from both a medical and cost perspective.
In these areas, health IT’s strength lies in its power to distill massive amounts of data from disparate sources, to provide mechanisms for faster, better decision-making and to open up new channels of communications between patients, providers and payers. At the end of the day, enabling the predictive, preventive and participatory approaches to healthcare made possible by IT is expected to yield the most meaningful and lasting returns to the industry and society as a whole.
In the new healthcare industry, stakeholders will continue to be challenged by tough choices as they seek to deliver the highest level of patient care with limited economic and human resources. For that reason, information technology will remain at the center of the new healthcare ecosystem, helping stakeholders harness the power of collaboration and knowledge sharing to improve care, stretch budgets and spark innovation.
Convergence will be a dominant trend in this world, and the most successful stakeholders will be those that exploit the value potential of cross-boundary integration and innovative technology partnerships.
About the author
Pradep Nair is senior vice president, healthcare, at HCL Technologies. For more information on HCL Technologies http://www.hcltech.com/.