Virtual care is increasingly becoming the preferred method of interaction for patients, informal caregivers and healthcare professionals. New behaviors triggered by digitization and distribution of healthcare systems combined with new therapeutic and care models will lead to a better experiences for all the stakeholders involved.
This involves focusing the whole organization on the delivery of exceptional, human-centric experiences and the rewiring of all functions of the organization — from research and development of products and services to commercial functions such as marketing and sales.
In the new healthcare era, the competencies and capabilities to make some care at home a reality will allow for location-agnostic care. Instead of healthcare always being tied to physical locations, it will at times be connected to the patient wherever he or she is located.
COVID-19 brought about a behavioural change in patients and healthcare professionals and also led to positive regulatory changes to issue new guidelines towards remote and virtual care. This is led to a shift in the debate from skepticism around digital health to how quickly the opportunity created by forced adoption at scale can be seized.
Challenges with Traditional Healthcare
The current healthcare solutions do not solve the needs of the 65+ population who may have multiple co-morbidities and may need continuous, affordable care. The consumer experience in health and life sciences has been slow to evolve — for patients, informal caregivers, healthcare professionals (HCPs) and researchers.
Distributed Healthcare
A high-quality healthcare system brought directly to patients where and when they need it. This requires creation of a tailored experience that considers the whole person, their environment and their preferences instead of an impersonal, standardized approach. These experiences will be proactive, contextually relevant and generate real-time and actionable insights instead of a reactive model that uses historical data. The proposed solution needs an interconnected network of resources and elements to facilitate a distributed healthcare system.
Scalable, Capital Efficient, Physician-led Solution
Market Size and Opportunity
63 million people enrolled in Medicare
25 million people enrolled in Medicare Advantage
220,000 Primary Care Physicians
116,000 Nurse Practitioners and Physician Assistants
Total Addressable Market
This includes Medicare expenditure through the federal health insurance program.
Serviceable Addressable Market
While the home healthcare spend is a significant number standalone, it is still a small percentage of the total spend on healthcare. As per CDC, 90% of the nation’s annual health care expenditures are for people with chronic and mental health conditions. Most parts of these conditions can be managed using a robust home healthcare system.
Why U.S. is Ready for a Distributed Healthcare System?
Value Propositions for Patients
Challenges with Distributed Healthcare
- Behavioural Change: Changing behaviour is challenging. Patients will need to form long-term habits, especially when no one is looking.
- Broken Experience: Virtual healthcare experiences are clunky and disjointed.
- Fee-for-service Models: Care financing incentives are non-aligned across stakeholders.
- Data Privacy: Patients are concerned about digital solutions’ privacy and security, how their data was being used.
- Spread of Misinformation: HCPs are challenged to combat cognitive load and misinformation.
- Supporting Infrastructure: The lack of supporting infrastructure, including life-sustaining and assistive durable medical equipment (DME), makes it challenging to manage patients’ acute care needs at home.
- Patient Safety: There are specific risks to patient safety in the home setting. These include: environmental hazards such as infection control, sanitation, and physical layout; challenges with caregiver communications and hand-offs; lack of education and training for patients and family caregivers.
Physician-led, Patient-centric Operational Model
Providing individual care experiences at scale will require a complete re-imagination of protocols, operations and safety measures with patient experience at its centre. A physician-led, patient-centric model will increase healthcare professionals retention and patient satisfaction.
Patients: Ability for patients to create a granular profile and input preferences where users select what they are willing to share and decide how much tailoring they want. Connected products will prompt structured questions and passively capture useful indicators with feedback and advice on how to potentially adjust treatment flowing between patient and HCP in a constantly evolving conversation.
Healthcare Professionals (HCPs): HCPs can be selectively served easily digestible treatment trends or the ability to consult with other relevant specialists based on the information flowing through connected devices and user inputs.
Healthcare Organizations: High acuity issues need to be managed at hospitals with dedicated equipment and resources to effectively deliver urgent care and perform complex procedures, while being financed by insurance providers.
Devices: Devices need to be connected to an ecosystem to allow for easy communication across the entire care team. Devices will also need to plug back into a care-at-home “command centre” to allow for 24/7 real-time condition monitoring and management.
Operational Model
Low Cost Collaborative and Efficient Model
Partner Network Development
New orchestration capabilities and supply chains for the home will need to be created to bring these items to the patient. Implementation and execution of a distributed healthcare system will require a collaborative effort to stitch together a patchwork of repeatable solutions, dependent on designing experiences and processes that solve for access and affordability issues.
- Insurance Providers: With a heavy reliance on Medicare, a network of insurance providers who are aligned with a long-term vision of distributed healthcare is required. The overall reduction on healthcare costs due to reduced dependency on hospital infrastructure will bring down costs for insurance providers.
- Life Sciences: New healthcare ecosystem will need to be developed with a deeper collaboration with life sciences as personalized medications become more available and central to a patient’s care.
- In-home diagnostics: Diagnostic centers can bring labs into the home, freeing up capacity at the office. At-home diagnostic kits like can passively observe a patient’s vital signs, digitally document results and alert HCPs when an intervention is necessary.
- Technology enablers: A revolutionary health-related search experience would be provided through technology enablers to make it easier for patients to book and share information with clinicians
Technology Architecture
Market Entry Approach
Target Market and Key Value Proposition:
Medicare Advantage (MA) offers unique and significant opportunity to eliminate waste out of the system. There are 3 key stakeholders of the business — patients, healthcare professionals and insurance providers. Following strategies for the different stakeholders can be leveraged:
Value-based Care Model
- Healthcare professionals are asking for value-based care system instead of fee-for-service model.
- Target the population with chronic diseases in the $900 bn medicare market where maximum impact can be seen in minimum time.
- There is strong economic potential under value-based care model by delivering high quality, low cost care to MA members.
Growth Model
- Drive organic growth of care seekers by accessing the user base of insurance providers and healthcare professionals through partnerships with them.
- Enter into local partnerships to leverage trust of the HCPs and other community members.
Insurance Provider Partnerships
- Build and manage partner networks in different cities for rapid scaling. Develop provider partnerships to offer full-suite services ranging from primary care to specialty and ancillary services.
Market Validation
Competitive Landscape
Risk Factors
- Business is reliant on external funding to a great extent
- Pandemic may impact the business and financial results
- Large dependence on employing and partnering with provides, if unable to retain them then business operations and profitability will be greatly impacted
- Achieving a threshold patient-physician ratio is critical to the success
- There may be significant working capital gap as large amount of payments are expected to flow in from third-party payors and individuals
- Payor partnerships are crucial as their patient mix will impact the profitability
- Highly regulated healthcare industry at federal, state and local levels
- Termination or non-renewal of Medicare advantage contracts between Centre for Medicare and Medicaid Services (CMS) and contracted health plans will adversely affect the business
- Network of physician partners and other providers will manage the quality and cost of care
- Quality of healthcare not under direct control but managed through partnerships with physicians and group practices
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