How the COVID-19 pandemic is affecting the healthcare value proposition

Health care is conventionally regarded as an important determinant in promoting the general physical and mental health and well-being of people around the world. An example of this was the worldwide eradication of smallpox in 1980, declared by the WHO as the first disease in human history to be eliminated by deliberate health care interventions.

Re-thinking the health system

Medical supply chain

The frontline workers and leaders in healthcare took heroic action to save lives. At the same time the crisis has revealed areas that could improve the resilience of the system. Some of these opportunities include ramping up measures to control the spread of such a fast-moving virus, greater resilience in the healthcare system to avoid being overwhelmed (for example, addressing weak links within the medical supply chain and developing the ability to flex up critical care capacity and clinical workforce), as well as ways to improve the baseline health of the population (for example, offering services to mitigate the prevalence of chronic conditions and obesity rates).

Tailored care

People with chronic conditions, the immunocompromised, and the elderly make up most COVID-19 deaths. For example, obese patients, defined as those with a Body Mass Index above 35, are 2 times more likely to be hospitalized and 3.5 times as likely to be admitted to the intensive care unit due to COVID-19. Telehealth offers a great opportunity to expand access. McKinsey estimate that COVID-19 could depress healthcare industry earnings by between $35 billion and $75 billion compared with baseline expectations.

Health vs Economy

Developing new and innovative business models will become important to achieve the level of EBITDA growth observed in recent years and deliver better care for individuals. COVID-19 has led to the potential for economic headwinds and a rebalancing of system funds. Strategies that align to attractive and growing profit pools, while important, may be insufficient to achieve the growth that incumbents have come to expect. For example, in the U:S 2019, 34% of all revenue in the healthcare system was linked to a profit pool that grew at greater than 5% per year (from 2017 to 2019). In contrast, we estimate that only 13% of revenue in 2022 will be linked to profit pools growing at that rate between 2019 and 2022.

Despite the pressure in earnings, organizations with businesses that operate in the lower-growth segments may still outperform and deliver higher-growth returns by improving productivity. Select high-growth segments will remain attractive (for example, virtual care, home health, software and platforms, specialty pharmacy) and will disproportionally drive growth. These high-growth areas are expected to increase more than 10 percent over the next five years, while other segments may stagnate or decline altogether.

Innovation is the key

Being market-oriented

To deliver greater value to stakeholders in the areas of quality, affordability, access, experience, and equity, healthcare providers need to rethink their value proposition. For any provider with plans to crack the healthcare market in 2021, our key piece of advice is to develop a clear value proposition. The value proposition should be a credible and coherent set of claims that demonstrate the value of the product or service to health and care providers and patients.

In the current health and social care market, it’s important to address problems that stand in the way of effective and efficient care delivery. There are currently powerful drivers for change which generally focus on quality, efficiency and money and a growing focus on care at home, improved patient safety, earlier diagnosis, earlier discharge, enhanced recovery, and providing real value for money.

Integration across the value chain

Driven by a combination of rapid development of technology and medical science, market demand, government policy, and financial pressures, the evolution toward new business models (for example, next-gen managed care, the simultaneous fragmentation of sites of care, integration of care around the patient, consolidation of care delivery institutions, technology-enabled healthcare services businesses) is already underway.

Growth in the healthcare services and technology vertical has been material, as players are bringing technology-enabled services to help improve patient care and boost efficiency. Healthcare services and technology companies are serving nearly all segments of the healthcare ecosystem. These efforts include working with payers and providers to better enable the link between actions and outcomes, to engage with consumers, and to provide real-time and convenient access to health information.

 

References:

  • https://www.mckinsey.com

  • https://safetravel.ch

  • https://thejournalofmhealth.com/


 

If you are living abroad and you need assistance for your health insurance, contact us!

 
Dhwty U.B

I am a business consultant who develop marketing and business management strategies that work for your company.

https://www.ahdconsultingsolution.com/
Previous
Previous

TPA in health care

Next
Next

Easter as an expatriate