Digital Strategy and the Shift to Value-Based Care
by Guest Author, Terence Maytin
The U.S. healthcare system is rapidly transitioning from fee-for-service to value- based care as part of massive and ongoing industry-wide transformation. Digital strategy is evolving to meet new challenges, help drive disruptive innovation, and better engage a large, growing audience of connected health consumers.
Already complex and fragmented, the healthcare sector will look very different over the coming years. The Affordable Care Act (ACA) has spurred rapid innovation and disruptive change across the entire ecosystem in the quest for better quality care across the entire population at lower per capita cost. Payers are accelerating rollout of value- based payment models with providers, and the shift to pay for performance arrangements with Pharma companies is increasing as well.
Moving an entire industry from volume-oriented reimbursement requires aggressive, innovative approaches to move from traditional siloed care to collaborative models, with system-wide provider coordination, patient engagement and proactive interventions. Technology will continue to act as a critical change agent, enabling large- scale improvements in process efficiency, automation, connectivity, collaboration, interoperability and advanced analytics.
With the convergence of healthcare and digital technology, industry stakeholders are reassessing their digital strategies to help tackle new business opportunities and challenges. Just a few years ago, digital health efforts largely focused either on acquisition marketing, community aggregation, or customer service portals designed to redirect volume from higher cost channels. However amid the current environment, digital offers much greater and far-reaching impact potential than ever before.
Digital investments are ramping up to support the shift from volume to value, particularly in the areas of care coordination, patient engagement, post-discharge monitoring, measurement, and behavior change. Since 2014, venture capital has provided $10B in new funding for clinical tools, analytics, consumer engagement, mHealth, telemedicine, wearables, and business services. In 2016, firms have raised a record $1.8B.
Two important trends drive home the relevance and importance of having a comprehensive, well articulated digital strategy: the rise of consumerism and nearly ubiquitous web/mobile adoption. Across all age groups, large audiences not only already consume digital services but also expect high quality, omni-channel experiences. In order to deliver on this promise, companies must design optimized, journey-based experiences that balance customer needs, preferences, and behaviors against desired business objectives and outcomes. Companies must embrace the concept of “putting the customer first” throughout the organization and across functions (e.g. strategy, product development, marketing, operations and technology). This also must be accompanied by an insights-driven, decision-making approach.
Essentially, digital strategy will be most effective if viewed as an organizational imperative. Armed with a holistic vision and comprehensive strategy, stakeholders will be better able to leverage and capitalize on digital’s full disruptive potential to help solve some of the most pressing challenges facing healthcare today.
Healthcare Industry Transformation
The transformation of healthcare is multidimensional and complicated. Disruptive innovation, technology and consumer trends are upending traditional business models. The competitive landscape is getting ever more crowded with new entrants while at the same time, insurer and provider consolidation is accelerating.
Consumers are motivated with more skin in the game and greater information access than ever before. Payment models are shifting from volume to value, and payers, providers, pharma, and medtech will need to collaborate and coordinate to a much larger degree within a more integrated care delivery system. These factors along with intense focus on quality improvement and evidence-based outcomes have big implications for the entire care delivery continuum…
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Guest Author, Terence Maytin is VP/Director | Head of Digital Strategy and Delivery | Digital Health Business Analytics and Technology and Strategic Advisor for First Growth VC.
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