In early March, I will be releasing my book, Looking Back – What I Learned When I Left a Great Company. There is a section of the book that discusses market forces in healthcare that are beginning to shift the foundation of healthcare in the US and across the developed world. The next two Weekend Reflections for Leaders will contain a short summary of the two dominant forces changing healthcare today.
As senior executives and the top talent on their teams prepare to build a sustainable business in the years to come, these two market forces need to be accounted for in their plans. Even though I describe these forces in the context of healthcare, these forces are making a meaningful and measurable impact on just about every industry today.
Market Force #1:
Artificial intelligence (AI) and predictive analytics are shrinking addressable markets
AI & predictive analytics are being deployed today with the power to quickly prove whether a company’s products/services are (or are not) making an impact. Basic computer software programs are grinding through the databases of health systems and insurance companies to make earlier and more accurate predictions of disease and choosing treatment options that are more effective than a traditional doctor
visit in all major chronic disease categories. In addition, these same software tools are addressing the difficult areas of cancer and mental health in both diagnostic and therapeutic intervention decisions.
Predictive analytic tools currently in the market today are making decisions faster, cheaper, and more effective than any current healthcare delivery system on the planet. Healthcare product companies building financial models on market size for a new drug, device, or diagnostic based on traditional population statistics and current market models will soon be viewed as misguided when software reaches a tipping point to drive the majority of healthcare decisions.
For traditional pharmaceutical and biotech companies, the emergence of digital therapeutics (or digital medicine) is upon us. As the regulatory agencies begin to approve digital therapies as monotherapy to treat chronic conditions, the age of “software as a therapy” is real and present. The rapid growth of digital therapeutic companies and “software as a device” technologies are emerging as a significant threat to the traditional healthcare players.
It is not just the sales and marketing models of these new companies that threaten established players. Many similar AI and predictive analytic tools are being deployed to accelerate drug discovery and optimize manufacturing processes.
The time and cost to develop effective digital therapies is drastically different than the current traditional models of drug discovery. The scalability and rapid deployment of these digital therapeutics that do not need traditional sales and distribution channels are creating a real threat to the entire infrastructure of traditional healthcare.
The unspoken comment in the minds of many players in some traditional businesses over the last 20 years that went something like, “I have just been NAPSTERed, AMAZONed, or UBERed out of a job” has finally come to healthcare.
The large commercial teams and R&D teams of most healthcare product companies need to address how they add value in a world where software tools drive most healthcare utilization decisions of potential customers and there is a rapid decline in the time and effort of human insight into patient care decisions. As the financial impact and patient health outcomes get better through software-based patient care decisions, where will leaders and teams be in 5 to 10 years? Look no further than someone in the record industry 20 years ago, someone in retail over the last decade, etc. Please don’t think it won’t happen in healthcare…it is already happening if you look close enough.
The continual debate about the unsustainable growth of healthcare costs will meet its likely end as software-based decision making becomes more fully deployed and costs are dramatically reduced through the removal of inefficient and costly human interventions still hanging on in traditional healthcare environments.
Senior executives and the top talent on their teams need to allocate a significant amount of time and attention to proactively addressing these market forces in order to minimize the risk of leading a once great business into a steady decline into the future.
What if I were to ask you, “What is the most difficult leadership challenge you are facing today?” What would you say?
Here are a few resources to help:
- Download FREE resources at www.harvesttimepartners.com
- Contact me. Email: firstname.lastname@example.org (M) 269-370-9275