Ernst & Young in their latest annual report ‘Progressions 2012 – The third place: healthcare everywhere’ tries to chalk out how companies need to fundamentally reinvent their business models to make them more patient-centric and better able to drive behavioural changes in consumers. Some excerpts from the report
Entering the behavioural change business
To understand and influence patient behaviour and successfully extend their business models in new directions, companies will need to leverage insights from the field of behavioural economics, which has made tremendous strides in the past decade at understanding the inherent decision-making biases that often prevent patients from achieving healthy changes.
Guiding principles for translating these insights into action highlighted by Ernst & Young includes:
- Disrupt the business you’re in – Life sciences companies need to find more patient-centric ways of creating, delivering and capturing value. This includes producing products/services with the features that most matter to patients, developing life-long relationships with patients, focusing on the customer experience and earning revenues from multiple sources (e.g, creating data insights rather than just selling drugs or devices).
- Learn from behavioural economics — Successful companies will boost adherence, enable prevention and build brand loyalty by using behavioural economics to understand what truly motivates patients. Understanding patient preferences will allow companies to “mass customise” their products and create more personalised offerings. But accounting for individual preferences will also require communicating information in more clear and neutral ways. (e.g. in direct-to-consumer advertising).
- Ajit Mahadevan, Partner — Life Sciences, Ernst & Young emphasised, “As the developed economies of the world deal with spiralling healthcare costs and the challenges of universal coverage for all their people, the move from ‘sick care’ to ‘healthcare’ is a necessity to create a model of healthcare for all that is sustainable. In India, we face a large unmet need in terms of disease burden—both chronic and acute. We have the opportunity to identify the ‘India way’ towards healthcare for all. Pursuing a strategy of moving our country towards a healthy outcomes based model will certainly be a critical enabler in achieving this. It will require the various stakeholders in this process to develop paradigms and business models that are unique to our requirements. There will be new and significant opportunities for traditional and non-traditional players in the emerging environment.”
- Personalised medicine approaches – In recent years, we have seen more life sciences companies adopt personalised medicine approaches. It’s easy to appreciate why—the widespread use of targeted therapeutics and companion diagnostics could completely revolutionise health care.
- R&D Focus – Using biomarkers to identify sub-populations that are most likely to respond to targeted drugs has enabled significantly more efficacious treatment regimens for several types of cancer. Similarly, the early identifi cation of biomarkers has the potential to make R&D considerably more focused and efficient.
From personalised medicine to behavioural personalised medicine
The patient-centric approaches of the third place now have the potential to take personalised medicine beyond genetics and into the realm of behaviour as well. And just as genetic personalised medicine promises to make the process of drug innovation more productive and efficient, behavioural personalised medicine has the potential to do the same for both product and business model innovation.
Growth opportunities have become increasingly challenging at times of patent expirations and mounting pricing pressures. The good news is that the third place will not be a shrinking market, but rather a growing one. The transition will not always be easy, but once companies are comfortable delivering in the third place and the health care system is more aligned around wellness and prevention, the market should expand dramatically.
|Accessing the markets of the third place|
By Frank Kumil, PhD, E&Y