Innovation in Healthcare
We are on the vanguard of an explosion of opportunities and challenges in the area of healthcare. Thanks to daily emerging technological advances, individuals, businesses, and universities from all over are joining forces to create an entirely new healthcare model. Working across industries, we are collectively tackling tough questions like: “How can we live longer?” and “How can we live independent lives as we age?”
Table of Content:
Trends in Healthcare Innovation
Mega Global Trends
Industry Changes and Moves
Changing Customer Needs
Value Chain in Healthcare Innovation
Innovation in Healthcare
Healthovations come from companies that have succeeded in making the world a healthier and happier place while at the same time capturing value for themselves. They have much to teach us in the health and well-being industry as well in the more general realm of business innovation.
The rush to fill these growing needs in the realm of health and well-being has spurred the creation of scores of new innovations, companies and organizations. While the stories of all of these organizations have much to teach us about business innovation, the stories included in Healthovate! feature some of the most successful, game-changing advances in this industry space. To accomplish these feats, Healthovate! organizations have developed innovations that:
• Make people feel better, live longer, or both
• Create both short-term and long-term value via a sustainable business model & a set of partnerships across the system
• Clearly outperform the competition in health and wellness outcomes
• Have the potential to create fundamental change in the health system and health industry
Trends Impacting Healthcare
There are four macro trends whose interactions are shaking up the economic landscape of healthcare and wellness. They are:
Mega Global Trends
Around the world, an aging population is greatly increasing demands for healthcare. As the median age of a country rises, increasing numbers of elderly people with health issues put pressure on healthcare resources. Healthcare costs and demands are expected to increase exponentially. By 2050, over 2 billion people will be 60 years old or older. Because of this trend—from Germany to Japan—new enterprises and industries are being born for the purpose of keeping the elderly living healthier, longer and more independently.
Globalization is driving changes in every industry. In health and wellness, globalization is improving the delivery channels and availability of medical products and services. Regulatory and political shifts are also creating major disruptions across health and wellness value chains around the world. Medical tourism, through Planet Hospital for instance, allows consumers to travel around the world to find the best prices for health services. As people become more aware of health and wellness options they are increasingly choosing travel destinations as a way to increase access to the health services they want or need. Elective surgeries offered by world-class Indian hospitals, for instance, are priced at 10-20% the rate of identical procedures conducted in Western hospitals. People from more developed countries sometimes look for safe but less expensive plastic surgery options in less developed countries like Venezuela and Columbia. Fertility treatments offered in Western European countries attract hopeful couples from the United States because the treatments are significantly less expensive than equivalent services in North America. The boundaries between continents are being steadily eroded, offering many consumers an ever-increasing array of healthcare options.
Industry Changes and Moves
RISING HEALTHCARE COSTS:
Healthcare costs, especially in the United States where healthcare accounts for about 18% of expenses, are a growing concern. Although the cost of technology is decreasing, systemic factors like insurance structures, the cost of medical education, and cumbersome regulations have resulted in significant increases in the overall cost of care. More general health trends around the globe are also contributing to higher healthcare costs: an aging population, obesity, diabetes, and a wide range of other long-term care diseases. In response, Healthovations have focused on creating more efficient cost structures and organizational systems to ensure that users in every community are able to pay for all kinds of therapies: from basic to life-saving treatments.
PREVENTIVE SOLUTIONS AND CHOICES:
Because the world population is aging and diseases requiring long-term care are becoming more prevalent, Western medicine has had to change its focus from treatment to prevention. Diseases like diabetes and high blood pressure are burdening the healthcare system, particularly in the United States. Instead of focusing on how to treat these ailments, many innovations have focused on coming up with ways to prevent these expensive and painful diseases. Associations like the Institute for Functional Medicine have created multiple solutions to encourage medical practitioners to move more decisively to offering more preventive healthcare for their patients.
Customers’ Changing Needs
In a world with abundant choice, we have opened ourselves up to innovation that enables health and well-being, but we have also opened ourselves up to bad habits. Sedentary lifestyles and increasing food consumption (particularly of foods high in fat and sugar and low in nutritional value) are leading to high levels of obesity all over the world. Despite increasing awareness, over 65% of adults in the United States are overweight. In addition, only 31% of adults exercise regularly and fewer than 50% of children exercise enough. Obesity is an exceptionally costly condition that leads to other long-term care ailments like diabetes and high blood pressure. Obesity has become a political and social issue, putting food and beverage companies under rising pressure from governments, health organizations, consumer associations and the media to behave as better corporate citizens. Companies are being asked to find new products and services that not only reduce ingredients contributing to obesity (like sugar) but also help to make us healthier. Other chronic conditions (like congestive heart failure, asthma, etc.) have also created similar innovation challenges and opportunities. Companies have responded by offering innovative approaches to prevent and treat chronic diseases so that consumers can opt to stay healthier, look better, and live longer.
Despite good intentions to lead a healthy life, many people are trying to achieve better health while maintaining a hectic agenda, as schedules become increasingly full and frantic. Companies are helping consumers to cope with their packed schedules by figuring out ways to tend quickly to multiple aspects of an individual’s healthcare needs. Many healthcare organizations are exploring new ways to create more efficient healthcare delivery. One of the most popular ways can be described as “one-stop health care.” As the name implies, health consumers can find everything they need in one spot. But the type of “one-stop care” varies with the consumer. Consumers looking for a specific kind of therapy or treatment will be happy to find complementary therapeutic providers for a particular health issue (e.g., services for disease prevention) that were once scattered over a geographic area now assembled into one central area where they all can be easily accessed. But there is another kind of “one-stop” health clinic where, for instance, low-income consumers can get more comprehensive healthcare at one low cost. An example of this is the CVS MinuteClinic.
CHANGING VALUES AND BEHAVIORS:
While practitioners of Western medicine are finding ways to serve their patients more efficiently, consumers who are not completely satisfied with their MDs’ prescriptions are turning more to “alternative” therapies or “complementary medicine.” These therapies include a wide range of practices: herbalism, acupuncture, traditional Chinese medicine, aromatherapy, iridology, homeopathy, and many more. Many alternative therapy providers prefer the term ‘complementary’ because they don’t see themselves as a substitute for conventional medicine; rather, their approaches offer something that can be used along with more standard approaches. Going even further beyond the realms of scientific and alternative medicine, more and more people are looking to spiritual cures to physical problems, believing that the secret of well-being and happiness is found in cultivating spiritual values or “sprituality.” (See the case of the “Art of Living.”) Today, the trend in spiritual healthiness is more weighted toward creating a foundation for an overall healthy and optimistic lifestyle. The number of people using alternative therapies is rising, and this is no doubt influencing conventional medical practices as well as innovations in the well-being industry.
Information technology and digitization of information has helped to transform many aspects of healthcare. Two of the most significant trends today are telehealth and electronic medical records. Telehealth employs telecommunications technology to support and provide in-home health care. This method of healthcare delivery has arisen from the need to find an answer to rising costs related to hospitalization and long-term treatments. By using remote wiring and wireless communications companies have helped to lower the costs of monitoring, diagnosing, and treating many illnesses. This trend will continue to become more prevalent as more and more people live far past the age of 60. Electronic medical records promise lower data storage costs, lower retrieval costs and more efficient billing; they also provide medical staff the means to search, find, analyze, and share medical records much more quickly and efficiently than ever before. Patient safety is also enhanced because medical history information — including lab work, immunizations, and allergies — can be stored in one easy-to-access place.
Social media and gamification of activities are also changing the healthcare landscape by altering how patients receive, process and use medical information. By using online networks or games as a way to encourage healthy behavior, a number of Healthovate! companies, including Nike and Goal Post, have found ways to make healthy activities much more interesting and fun! For instance, members of an online exercise forum might share their daily fitness results (e.g., miles run, calories burned, etc.) with others in a competition while earning (and comparing) scores based on performance, as they can do when using Nike Fuel. Gamification and social network support provide new ways to curb unhealthy habits with help from friends, professionals, and people known to consumers only in cyberspace.
Value Chain in Healthcare Innovation
If we look at all the Healthovations through the lens of the innovation value chain, we can see that the majority of innovations are new Offerings, followed by new methods of Delivery and Business Models. The true power behind these innovations is that most of them focus on changing two or more elements across the innovation value chain. This simultaneously improves the product or service to the consumer, enables greater access to those products or services, and makes it harder for competitors to imitate. Figure describes how healthovations have emerged to impact each step of the innovation value chain for the health and well-being industry space.
How Do You Innovate in Healthcare?
We found five non-mutually exclusive types of healthovations that are, cumulatively, allowing companies to help people feel better and live longer.
We define these categories as:
CONVENIENT CONTROL — Healthovations that improve knowledge and precision of care for professionals or individuals
ENJOYABLE ENGAGEMENT — Healthovations that improve health in social or entertaining ways
FANTASTIC FEELING — Healthovations that improve wellness by making a person look or feel better
HONEST HOPE — Healthovations that give people a chance to get better than previously expected
PAINLESS PANACEA — Healthovations that reduce the pain or stress of getting better
These categories are highly connected and depend entirely on an organization’s ability to build and sustain trust with current and potential customers. What this means is that companies who are healthovating successfully aren’t doing one of these things; they are doing most if not all of them. In order for you to healthovate, you need to be doing one or more of these things.
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