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ISG Global Healthcare 2020+ Trends

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To adequately adapt their strategies and do what is needed to position themselves for growth, Healthcare ecosystem participants must understand what’s happening in the market today and what to expect in years to come. Here are the trends that will have the biggest impact on healthcare industry players in 2020. Learn more: https://isg-one.com/industries/healthcare

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ISG Global Healthcare 2020+ Trends

  1. 1. ISG Confidential. © 2020 Information Services Group, Inc. All Rights Reserved. Proprietary and Confidential. No part of this document may be reproduced in any form or by any electronic or mechanical means, including information storage and retrieval devices or systems, without prior written permission from Information Services Group, Inc. Global Healthcare 2020+ Trends Bob Krohn, James Burke, Tony Mataya Healthcare 13 April, 2020 ISG RESEARCH
  2. 2. 2ISG Confidential. © 2020 Information Services Group, Inc. All Rights Reserved. The Healthcare Industry Landscape is Evolving Healthcare MSP’s Providers Payers Suppliers Buyers / Influencers Enablers Technology Service Providers Health Tech Companies Suppliers expected to adapt to the change from fee-for-service to value-based care Technology is supporting seemingly conflicting goals: greater value at reduced cost Buyers expecting personalized and cost- effective care are supported by regulators Source: ISG Research Patients Regulators
  3. 3. 3ISG Confidential. © 2020 Information Services Group, Inc. All Rights Reserved. Value-based Care Source: ISG Research. ● Focus on suitability of drugs in treatment paths ● Increased focus on outcomes based on real-world evidence Pharma Companies ● Increased collaboration with providers ● Working with newer care delivery models, such as Medicare’s Accountable Care Organizations (ACOs) Payers Providers ● Need to continuously monitor health of high-risk patients ● Services moving to Ambulatory Care Centers (ACCs) - (in the U.S.) ● Focus on health outcomes for a defined population ● Treatment paths that are cost effective ● Early detection and care to ensure ailments do not reach advanced stages Shifting focus to “health outcomes” rather than “disease care” Technology is fundamental to all three stakeholders in delivering value-based health services to the population. ● Patient centricity gaining the center stage ● M&A is being driven by the need to acquire new IP’s and Technologies ● Tech giants entering the healthcare industry Current Status Outcome
  4. 4. 4ISG Confidential. © 2020 Information Services Group, Inc. All Rights Reserved. Most of the developed countries are on the path to adopting value-based care (VBC). However, developing countries lack the required infrastructure and government support Shift Toward Value-based Care Asia Pacific Rising healthcare costs are driving the demand for VBC in Australia. Infrastructure required for VBC is still under development in Japan. VBC in China is still in its exploratory phase. Only 24% of Indian population has health insurance. The infrastructure required to support the VBC model is not available in India. Europe Strong push for outcome-based payments is driving the adoption of VBC in the UK, Sweden and Poland. Implementation of VBC is moving slowly in Germany and Netherlands despite interest from the local governments. No push from the local governments towards VBC in European countries like France, Spain and Russia. North America Existing universal care is making it easier for Canada to implement VBC. Lack of IT interoperability is still a barrier for implementing VBC in the US. Latin America Most of the countries in Latin America still follow a pay-per- service model. Middle East and Africa Turkey and UAE have set up new healthcare policies that constitute a plan towards VBC. Source: ISG Research
  5. 5. 5ISG Confidential. © 2020 Information Services Group, Inc. All Rights Reserved. Evolving Rationale Behind M&A Activities Traditional Reasons for M&A Increasing scale & portfolio of services Reduce competition Expand geographically Horizontal M&A Newer Reasons for M&A Improving the quality of care Greater capacity for personalized care Acquisition of new technologies and IPs Vertical M&A ‘Digital’ M&A Pharma Payer Pharma Payer Payer Pharma Or Pharma Payer Health- Tech Company Source: ISG Research. Or
  6. 6. 6ISG Confidential. © 2020 Information Services Group, Inc. All Rights Reserved. Use of technology including analytics and IoT to personalize healthcare is gaining traction Increasing Focus on Patient Centricity Source: ISG Research. Increased Interaction with Patients Wearables such as medical implants and tracking devices help monitor patient health Effective data analytics help understand and improve efficacy of treatments Mobile apps help monitor patient status and better manage diseases Digital channels can also be used for social influence and promote a culture of wellness Patients are becoming vocal to influence the course and choices of their own care
  7. 7. 7ISG Confidential. © 2020 Information Services Group, Inc. All Rights Reserved. Tech Giants such as Apple, Microsoft, AWS, Google are Partnering with Hospitals to Leverage Diagnosis Data to Train their AI Systems Key Developments ⬤ FDA approved AI software to screen patients for diabetic retinopathy ⬤ Arterys, a GE Venture backed startup launched cloud platform for analyzing cardiac images ⬤ Google’s DeepMind image recognition technology matched accuracy of medical experts in diagnosing 50 types of eye diseases Source: ISG Research Please refer speaker notes for more details Challenge: Patient Data Management Technology Solution: AI, Big Data, Electronic Medical Record (EMR) Healthcare Industry Challenges and Associated Technology Solutions Challenge: Remote Access to Telemedicine Technology Solution: Wearables, Mobile Health Applications, 5G Challenge: Effective Payment Model Technology Solutions: value-based payment, self-pay solutions and analytics Challenge: Accuracy in Diagnosis Process Technology Solutions: AR/VR, AI, IoMT, image recognition
  8. 8. 8ISG Confidential. © 2020 Information Services Group, Inc. All Rights Reserved. Shift from Hospitals to Ambulatory Care / Surgery Centers in the US Source: ISG Research Impact of rising preference for ACCs/ASCs on healthcare providers Most profitable procedures such as the knee replacement surgery shifting to ACCs/ASCs Decline in hospital-based outpatient surgery Increased financial pressure on Hospitals and Medical Institutions Current Market Situation ● Aging population in the US ● Rising cost pressures on hospitals ● Overcapacity Increased Margin Pressure on Healthcare Providers Increase in relevance of ASCs ● Reduced costs compared to Hospitals ● Reduced wait time for patients ● Improved access to care for patients Benefits Offered by ACCs/ASCs ● Movement from inpatient surgeries to ACCs/ASCs continues at a steady rate. ● The Center for Medicare & Medicaid Services is continuously increasing the list of approved surgical procedures for ASCs
  9. 9. 9ISG Confidential. © 2020 Information Services Group, Inc. All Rights Reserved. Patient Data is the Most Valuable Asset in the Healthcare Industry Healthcare investments and strategic priorities vary across big-tech companies, service providers and startups. • Collecting patient data by partnering with hospitals to develop health platform and AI system • Developing own health records via HealthKit's API • Leveraging machine learning to extract insights from patient data • Enabling digital transformation journey by leveraging Business 4.0 framework • Cloud-based data management tools to provide holistic view of patient information across the system • Healthcare integration and collaboration platforms for integration of patient’s health and finance data • Blockchain technology to create a user-focused electronic health record • Big Data platforms to process healthcare data to create unified patient records • Analytics solutions to make intelligent data-driven decisions for better value care Service Providers StartupsBig-Tech Players
  10. 10. 10ISG Confidential. © 2020 Information Services Group, Inc. All Rights Reserved. MedTech Companies are Shifting towards Service-Oriented Business Model MedTech companies are partnering with digital healthcare providers to stay relevant in the competition while shifting their focus from traditional product services to value-based service. Clinical Quality and Outcome Services ● Patient management and monitoring ● Clinical decision support ● Remote patient monitoring ● Clinical operation analytics ● Care management services ● Workflow consulting support By Industry and Solution Cost and Growth Strategy Services ● Patient data collection ● Process improvement and lean optimization ● Third-party services (back-office outsourcing) ● Patient acquisition ● Patient risk stratification ● Financial services ● Remote equipment monitoring Medtronic: The company offers Care Management Services to monitor patients remotely which enables value-based care at home. BD: The company’s Infusion Analytics Services helps in evaluating patient safety practices and supports compliance & accreditation efforts. GE Healthcare: GE has introduced GE Health Cloud a healthcare-specific SaaS that provides clinicians single portal access to patient's data, images and analytics to increase efficiency across healthcare enterprise.
  11. 11. 11ISG Confidential. © 2020 Information Services Group, Inc. All Rights Reserved. Unlikely Strategic Alliances are Transforming the Healthcare Industry Landscape ⬤ Amazon has partnered with Berkshire Hathaway and JP Morgan to create the HAVEN consortium. ⬤ Through this consortium Amazon aims to provide health insurance coverage to its employees in the US and potentially offer other market making services. ⬤ In 2018, Cigna acquired pharmacy benefit management company Express Scripts for $67B. ⬤ In 2019, Express Scripts partnered with Prime Therapeutics to provider affordable care to their members. ⬤ CVS Health acquired a health insurer, Aetna, for $70B. ⬤ CVS Health acquired Centene's Illinois health plan subsidiary named IlliniCare Health Plan. ⬤ Walgreens partnered with Humana to boost enrollment in Medicare for the U.S. seniors. ⬤ Walgreens Boots Alliance partnered with Kroger to form Group Purchasing Organization. ⬤ TriHealth acquired seven of Walgreens’s healthcare clinics. ⬤ Walmart has opened its first Healthcare Services super-center in Dallas. ⬤ With Acquisition of GreatCall Best Buy is offering home-based care. ⬤ Walmart partnered with Express Scripts to provide its prescription services access to Express Scripts' clients.
  12. 12. 12ISG Confidential. © 2020 Information Services Group, Inc. All Rights Reserved. Top Priorities for Healthcare Providers: Develop a Solution for Gathering More User-Generated Data and Offer Customized Services KeyTakeawaysfor ServiceProviders WhatarePayersand Providersdoing? Post the COVID crisis, healthcare industry is expected to progressively invest in As-a-Service solutions as they prioritize a digital-first pathway to improve patient care. Tech giants, government agencies and universities in the US have created the COVID-19 High Performance Computing Consortium. Service providers can capitalize on showcasing their automation and AI capabilities as healthcare enterprises are expected to accelerate their investments across these technologies post COVID crisis. Services embracing emerging technologies such as automation for claims management were of top priority amongst the healthcare enterprises during COVID-19 crisis. ISG’s Contract Database shows deals worth >5B that have a digital component in scope are coming up for renewal across regions between 2H 2020 to 1H 2023. Between 2018 and 2019, the industry has witnessed digital health M&A valued at >$17B. Majority of the M&A’s were focused on technologies such as AI, cloud, analytics and telehealth. Payers such as UnitedHealthcare are deploying virtual care tools. Tampa General Hospital in Florida implemented Care.ai’s thermal- scanning face cameras to detect patient with COVID-19 symptoms. The COVID-19 pandemic has led to an increase in demand for telehealth solutions as a greater number of healthcare providers are shifting towards telemedicine to remotely monitor patients and lower costs. Insurers and health-tech companies across the globe are developing mobile-based self diagnosis apps and platforms to check for illness such as COVID-19. Please refer speaker notes for more details
  13. 13. 13ISG Confidential. © 2020 Information Services Group, Inc. All Rights Reserved. Digital Health Providers are Supporting all Stages of COVID-19 Patient Lifecycle The increase in remote healthcare services has required EHR providers to build video capabilities in their offerings by leveraging third- party platforms such as Microsoft Teams, Zoom and Webex. Telehealth Providers: • Waiving license fees temporarily • Scaling-up offerings using chatbots • Offering remote technology training courses for hospitals • Expanding service offerings into test kit supply service and quarantine patient management Triage & Test Providers: • Chat-bot based solutions are widely available in the Western and East Asian countries • Differentiating their offerings by providing test appointment scheduling services Tracking and Tracing Providers: • Geofencing solutions. (mostly across countries with stringent data privacy standards) • Population movement tracking service Primary Care Providers/Payers: • Using robots to reduce contact with patients and caregivers • Adopting Telehealth Pharma: • Partnering with digital health solution providers. • Focusing on developing platforms for “Beyond the Pill” strategies • Leveraging AI in drug development and clinical trials Payers: • Integrating telemedicine in their plans. • Automating business processes • Offering insurance coverage for COVID-19. What Digital Health Providers are Doing? What are Major Industry Participants doing? Digital Therapeutics Providers: • Providing specialized services such as quarantine coaching • Evidence-based therapy for people dealing with mental health issues during quarantine Connected Devices: • Targeting remote examination at hospitals and at home • Offering connected thermometers and blood oximeters Call Center: • Implementing dedicated lines for COVID-19 • Automating of Q&A platform • Adding scheduling protocols to route patients to the mobile- testing unit based on response
  14. 14. 14ISG Confidential. © 2020 Information Services Group, Inc. All Rights Reserved. Post COVID Crisis, Governments across Regions are Expected to Create New Framework on Sharing Healthcare Data Singapore Health Sciences Authority (HSA) issued the Health Products and Devices Exemption Order 2020. Singapore's Personal Data Protection Commission has relaxed its terms to use personal data for tracing. Malaysia Malaysian Medical Device Authority (MDA) announced registration exemption for devices through a Notification of Medical Device for Special Access. Thailand Thai Food and Drug Administration (FDA) announced reclassification of alcohol containing gel products as cosmetic goods. European Union: Cyber Security guidance has been issued by the Computer Emergency Response Team for the EU (CERT-EU) in the context of COVID-19. Pan-European Privacy-Preserving Proximity Tracing (PEPP-PT) toolkit has been launched to detect nearby infected patient. As per Irish Computer Society, 87% of the Irish public are willing to share personal data to track & trace patients. Germany’s Fraunhofer Heinrich Hertz Institute for telecoms (HHI) has developed contacts-tracing proximity technology for COVID-19 Germany has changed its legal restrictions for telemedicine services. European Commission has announced ~$170M funding via European Innovation Council (EIC) to combat COVID-19. All private hospitals across Spain have been nationalized. U.S. Apple restricts COVID related apps that are not from recognized institutions such as governments. FDA has issued Emergency Use Authorization (EUA) policy to expedite COVID diagnosis. *CMS will take care of payment for people opting telehealth services. *FCC approved $200 M to fund telehealth services for medical providers. Oracle launched their Health Sciences Data Management Workbench Cloud Service, a platform that can be used to enable pharmaceutical companies and contract research organizations to integrate, reconcile and analyze the growing variety and volume of clinical and healthcare data. China Cyberspace Administration of China (CAC) has issued guidance on protecting personal data. *NMPA has announced emergency registration of medical protective clothing devices that meets EU and the U.S. standards. Israel Israel government has passed emergency law to track people using mobile data. *National Medical Products Administration (NMPA) *Centers for Medicare & Medicaid Services (CMS) *Federal Communications Commission (FCC)
  15. 15. isg-one.com ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 700 clients, including more than 70 of the top 100 enterprises in the world, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,300 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data.

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