The U.S. health care system is undergoing an unprecedented seismic shift. There is massive disruption everywhere, and it is transforming how health care works — or doesn’t. It’s also changing the many ways stakeholders work in relation to it.
Health care has been in flux in one way or another for a half-century. “Change is inevitable; growth is optional,” opened my presentation at a health care marketing workshop 20 years ago. But this is different; health care is now being transformed from the outside in. Capitalism, in size and scope, is being unleashed across the continuum of care, and the industry is buffeted by a historic convergence of outside marketplace forces.
Unfettered competition — on pricing for services, quality and convenience — is rapidly accelerating. Trillions of dollars are in play as never before. This shift has created what can best be understood as a risk economy, one that ushers in an age of disruptive innovation in business and care, products, data integration, technology, science and partnerships.
The lines between stakeholders — hospitals and systems, health care professionals, business and industry, payers, federal and state governments, patients, taxpayers and yes, even Big Pharma — are increasingly blurred.
Retail and consumer-facing medicine is taking hold, transforming access, cost and convenience of care. Many traditional care providers are unnerved. What will happen as Amazon, Walmart, Apple, CVS and other innovators scale their interests and flex their muscles in this space?
Risk is now the preeminent determinant driving this transformation. All stakeholders have real skin in the game and there will be winners and losers. Who will be left standing and in what shape, nobody knows. (Note to med students: Choose your specialty well!)
“Health care now lives in a risk economy” is a phrase I developed in consultation with health care and business leaders to better understand and underscore this shift and to identify the real-world implications of this new era.
While the risk economy is the death knell for the status quo, my view is not a one-sided tale of indiscriminate disruption. Health care’s risk economy offers new opportunities for all stakeholders. Success, as always, will be in the details.
For businesses, the shift to the risk economy is redefining what’s possible for health care in business. Value and quality can be found in the deeper insights, the greater precision, the refinements made possible by leveraging the data and competitive tensions in play. Managing for business goals and quantifiable results that have until now been out of reach should now be strategic priorities.
Corporations and businesses of all sizes have long been frustrated by the cost and complexity of medical care, and they want more control, transparency and value. They want solutions more precisely aligned with their employees’ priorities and the businesses’ bottom lines. With society transitioning from a mindset of seeking treatment to one of illness prevention and pursuit of wellness, businesses will be challenged to deliver ever more precise and comprehensive solutions to meet employee expectations and competitive demands.
The Journal of the American Medical Association recently reported that 20%-25% of U.S. health care spending is wasted. That’s $800 billion annually, for those keeping score. Even before getting into specifics, that’s a strong conversation starter for business leaders when meeting with vendors about their health care spending.
Business leaders should now seek to:
- Adjust strategies to leverage the shift in power and marketplace dynamics,
- Reduce employers’ and employee health care costs,
- Improve transparency and outcomes in partnership with employees and payers,
- Stabilize and lower pharmacy costs and
- Determine if health and wellness have an impact on the company’s bottom line and employee health and wellness goals, and respond accordingly.
The ripple effect of health care in the risk economy touches everything and everyone. No one should be a disinterested bystander.
Tom Ricciardone of Little Rock works with companies and health care organizations on marketing, communications, culture and sales. Email him at TomThinc@Gmail.com or visit HealthcareRiskEconomy.com.
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