Convenience has become the new currency. Over the past decade, consumers have grown accustomed to a seamless digital experience. At the same time, health care consumers (patients) have taken a more active role in educating themselves and directly managing their health. With more than 80% of consumers researching their healthcare options, new technologies provide consumers with new ways to live healthy and manage certain conditions. And for healthcare organizations to gain a competitive position in the minds of consumers, convenience is a primary concern. Healthcare consumerism should empower consumers to be involved in their health care decisions throughout every step of the patient journey.

BLOG SOURCE

However, while rising customer expectations drive new business models, increased choice pressure also affects existing healthcare organizations. Consumers are increasingly cautious about how, when, and where they pay for healthcare services. They will make decisions, less as patients and more as individuals within specific contexts – as a mother, daughter, friend, and family member. Increased price transparency is prompting more pricing information and, therefore, more shoppable healthcare services, according to a 2020 McKinsey consumer healthcare survey. In other words, healthcare organizations should envision their patients as health care consumers.

The Health Care Consumer

The era of digital health. Soon it will be just the era of health. Digital is becoming so intertwined with health care that it’s now to be expected by consumers. Consumer loyalty is a significant driver of health system profitability. Still, unfortunately for hospitals and health systems, the overall brand preference among healthcare consumers continues to decline, from 31% in 2018 to 36% in 2020. While many customers lack a clear preference for a given healthcare brand, this is likely not a reflection of negative care experiences. As informed consumerism rises, health systems will need to shift how they attract, engage, and treat new patients. This expectation is why the research, development, testing, and deploying of novel digital health technologies and tools should be considered long-term investments that will net great returns.

Healthcare organizations must continue to prioritize digital health solutions, including a protocol to support efficiency. There is a direct correlation between health systems with structure and processes surrounding innovation and the ability to implement and scale innovation quickly.

In the traditional healthcare settings, patients were not involved in decision-making about their health and disease management. This began to shift dramatically in the 2010s with the digitalization of healthcare tools and services. In the last decade, we have changed care models by virtualizing medicine, where it makes clinical and economic sense. Although it took a pandemic to drive clinical adoption of digital health tools, has anything changed how health care consumers want to interact with their providers? The simple answer is…yes. In a recent 2021 HIMSS survey, “Patient Communication Preferences in 2021,” released by SR Health, patients express that they want more digital tools, especially text messaging. The survey also found that age continues to be less of a barrier to electronic forms of communication. 

Rapid development and deployment of innovations will be critical in the post-pandemic world. While the COVID-19 pandemic has placed unprecedented demands on modern healthcare systems, the industry’s response has vividly demonstrated its resilience and ability to bring innovations to market quickly. At the height of the pandemic, providers rapidly scaled offerings and saw 50 to 175 times the number of patients via telehealth compared with what they did before.

Transparency and data are essential to the evolution of health care. The current trend is that health systems regard innovation with an emphasis on quantifiable results, such as revenue generation or reducing costs. Shrinking revenue at traditional health systems results from widespread industry changes, including lower reimbursement, movement of care to outpatient settings, and what health care consumers expect from their patient experience. The resulting pressure has health systems looking to innovation as revenue generation.

The health care industry’s appetite for data has grown beyond storing and sharing medical histories. In a recent PricewaterhouseCoopers (PwC) report on top health industry issues of 2020, health care consumers and incorporating digital health into organizational strategies are two significant focus areas for healthcare organizations. In 2020, healthcare organizations made strategic deals to grow larger and expand into new identities with platforms anchored in value, innovation, customer experience, and population health. There’s now a better understanding that digital and analytics technologies have the potential to predict health needs and engage systematically with health care consumers in real-time.

Digital Health Funding – 2021

During the five years leading up to 2020, the adoption of digital health steadily climbed. The pandemic accelerated adoption even further, and the rise continued. However, the rate of change in adoption differed by technology and subgroup. In Rock Health’s 2020 Market Insights Report: Chasing a new equilibrium, confidence in digital health technologies and tools’ potential continued to progress. In 2020, venture capital dollars flowed to US digital health companies at a new all-time high, with over $14B invested across 440 deals.  

The first half of 2021…2021 already surpassed 2020’s overall funding record, with $14.7B invested across 372 US digital health deals with a $39.6M average deal size. Fifty-nine percent of that funding came from 48 mega deals ($100M+), including one of the largest single rounds of investment in digital health history: health care consumer organization Noom’s $540M Series F round. Monthly funding in June 2021 ($3.1B) was almost triple that of June 2020 ($1.1B), when digital health funding numbers accelerated after the first COVID-19 shutdowns.

Digital tools that facilitate innovative methods and modalities to improve health care, enable lifestyle change, and create efficiencies are progressing quickly. According to the H1 2021 Rock Health Digital Funding Report, investors didn’t change their overall strategies going into—or emerging from—the pandemic. Instead, they’re doubling down on their bets. The top-funded value propositions for 2020 and H1 2021 are consistent, with companies catalyzing biopharma/device R&D ($2.7B) and those delivering on-demand healthcare services ($2.6B) bringing in the most dollars.

The Future Value of Health Care Consumers

Consumer engagement has become increasingly crucial for all healthcare industry stakeholders. Health care consumers want high-quality care that is easily accessible and affordable. The theory of health care consumers is that they take ownership of care decisions based upon costs, understand the full scope of options available to them based on research and trustworthy sources of information, and leverage their use of technologies.

As more health systems adopt a digital health business strategy, future reports will find healthcare organizations offering digital tools more efficiently and greater utilization of these devices and services by patients.

BLOG SOURCE

- LOGAN HARPER 

By Logan Harper, MS

Keywords: Emerging Technology, Innovation, HealthTech