New players from outside the traditional business of healthcare are redefining the global healthcare market for consumers, providers, payers and investors in both developed and emerging markets. These new entrants from the retail, technology and telecommunications sectors are seizing opportunities to bring consumer acumen and new ideas to challenges in the healthcare industry.
These are some of the highlights from recent research conducted by PwC across the global healthcare industry.
The $9.59 trillion global healthcare market is receptive to innovations that can supplement or release traditional person-to-person clinical intervention in both developed and developing countries. PwC’s report, titled ‘Global health’s new entrants: Meeting the world’s consumer,’ shows how new entrants – companies worldwide whose core business resides entirely outside of the health space or are expanding into new health roles – are pioneering pathways into virtual healthcare, more affordable and convenient care options, clinics that replace inflexible public health, fitness and wellness and much more. These disruptive, entrepreneurial arrivals to the health sector have the potential to capture tens of billions of dollars in revenue currently going to traditional healthcare.
Patrick Figgis, PwC Global Healthcare Leader, says: “Healthcare represents a significant market opportunity and new entrants recognise that their insights, global reach and value are all distinguishing factors that can assist in grabbing market share.
“Furthermore, our research shows that global megatrends such as changing demographics, globalisation and technological advances are impacting the health industry and resulting in new business models, the rise of new entrants, and the delivery and financing of care.”
The world continues to face an increasing number of healthcare challenges. In the emerging markets, the lack of healthcare access continues to be a growing problem. In the developed world, rising healthcare costs is also an ongoing challenge. Global populations are aging, putting a strain on resources and shifting needs toward chronic disease. This is happening at a time that populations across the globe are gaining economic ground. These populations have more resources, more access to technology and bigger demands. As demands rise, the healthcare industry is experiencing a shortage of skilled workers.
South Africa is a microcosm of what is happening in other developed countries. Just like other parts of the world, South Africa is experiencing an increase in chronic diseases. Tuberculosis and HIV/AIDS remain the top causes of death in South Africa. Access and quality to healthcare also remain an issue. South Africa has lost more than US$2b in investment from the emigration of domestically trained doctors to Australia, Canada, the UK, and the US, according to official statistics. Reform of the healthcare system is taking place but is slow going. For example, the newly introduced national health insurance scheme will take more than a decade to fully implement.
Of the Fortune 50 companies, 24 are new entrants. The top companies also include 14 traditional healthcare organisations. This fertile ecosystem is attracting diverse, sophisticated new entrants into healthcare. With consumers now at the centre of healthcare, new business models that depend on collaboration are required. No single organisation has the requisite competencies needed to support the continuum of care.
According to PwC’s study, innovations can spring more rapidly from emerging economies than from developed countries, where healthcare systems are more entrenched and regulated. Where urgent needs prevail in a less regulated environment, health solutions offered by new disruptive forces can root more quickly. Technology is also becoming less of a barrier. New entrants can test their products and services in more receptive markets before launching proven business ventures in more regulated nations. For example, through the Mobile Doctors Network (MDNet), nonprofit Africa Aid has harnessed the power of mobile to create a health infrastructure breakthrough in Africa—the world’s first country-wide mobile doctors network.
As the world pivots ever closer to the ‘virtualisation of care’ – with the bundling of mobile, digital, and wireless – these new entrants will be well-positioned to offer amazing breakthroughs that help erase healthcare boundaries and enable care anywhere.
Consumers today demand a more convenient and transparent healthcare experience that mirrors the convenience and transparency of banking, retail and other services. A high 82% are open to new, non-traditional ways of getting medical attention; 74% are open to receiving a virtual doctor visit; and 55% trust the Internet more than the doctor.
Furthermore, new partnerships are forming to create new ways to access and deliver care. The new health economy is an evolving ecosystem comprised of new business models, technology innovations and partnerships. Within this continually evolving ecosystem, new access points and entities are emerging. New entrants, typically traditionally non-health entities, are entering at various points to improve the various modules of health. For example, the $276 billion health and wellness market is dominated by employers and fitness and nutrition companies.
The trend toward lower cost care settings is consistent in both developed and emerging markets. Building health infrastructure is a major challenge: growing nations are burdened with increasing need, and developed countries are closing hospitals or converting them to other types of facilities. There is now a trend to move from expensive venues of care, for example, the hospital to lower cost settings, reflecting a need for new entrants to connect hardware, software, networks, diagnostics, etc. for integrated solutions of care.
“Given the pervasiveness of lifestyle diseases in South Africa, the market is ripe for new entrants in the health and wellness space. New entrants are already successfully offering services and products such as fitness, reducing weight, etc.,” adds Figgis. Growth in chronic diseases as nations become more affluent is compelling governments to invest in preventative medicine. The growing awareness of healthy workers as a corporate responsibility is a strong trend in the developed world
Figgis concludes: “Doing business with reputable new entrants provides an opportunity to build sustainable solutions that meet policy and business goals.
“New entrants bring innovative ways of doing business to the healthcare table. Healthcare organisations should consider how this new affiliation or product might supplement the business.”
Senior Manager, PwC South Africa
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