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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Global Healthcare 2020+ Trends
Bob Krohn, James Burke, Tony Mataya
Healthcare
13 April, 2020
ISG RESEARCH

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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

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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

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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

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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

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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

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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

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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

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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

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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.

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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.

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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

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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

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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)

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