With the proliferation of technology and value-based pricing rules under the Affordable Care Act, the document discusses how healthcare is decentralizing with a focus on outcomes. This will challenge traditional business models and reimbursement structures by increasing transparency, accountability, and shifting value towards solutions that improve patient outcomes. Technology advancements are enabling more consumer-driven and evidence-based care delivered virtually or at home, which has the potential to drastically reduce costs while improving quality. Healthcare companies that can own and coordinate this emerging technology and data domain can shift the economics of care.

1. With proliferation of technology and ACA value-based pricing rules,
healthcare will continue to decentralize with a focus on outcomes
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From: Traditional Model To: Connected Health Model
Provider perception of
product value
Payers reimburse
indiscernibly
Patients consumes
passively
Current
Future
 Access based
on evidence of
safety &
effectiveness
 Provider has
little influence
 Value shift
lowers margins
 Unrestricted
access
 ‘Simple’
provider
influence
model
 Predictable
profit margins Instrumentation and
measurement
Patient accountability
Tiered healthcare supply
and demand model
Standards of care
Informationandoutcomes
transparency
• Information transparency from real world evidence will challenge access, safety, and reimbursement,
driving up the bar for safety and efficacy and driving down margins of current business models
• Value shift away from products to solutions, to identify the right solution for the right patient to deliver
the right outcome – e.g., diagnostics, monitoring, medicine, lifestyle, incentives, etc.
Source: InnoAction Advisory

2. Protocolization of care combined with higher patient engagement
will further put the consumer in charge of their health
• Standards of care and protocolization of care through consumer/ home diagnostics and differential
diagnoses tools can enable more evidence-based, coordinated, and value-driven healthcare
Source: Bain
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3. The advent of mobile, sensor, and wearable tech has opened up a
huge potential for consumer-driven healthcare
Source: IBM
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4. Virtual, digitized, and evidence-based care has the potential to
drastically reduce healthcare costs, while improving quality
Source: InnoAction Advisory
Quality
Cost
Evidence
Low High
Low
LowHigh
Physician Office
Hospital
Home Health
Telemedicine
Coordinated Care
EVIDENCEINFORMATIONHEURISTICS
Digitized Health
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5. Virtual, digitized, and evidence-based care has the potential to
drastically reduce healthcare costs, while improving quality
Source: Oliver Wyman
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6. Healthcare companies who can own and coordinate this emerging
technology and evidence domain can shift the economics of care
Source: IBM
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7. Technology advancements combined with significant cost pressures
and shifting consumer norms will drive business model shifts
Evolving Challenges for Incumbent Business Models
Enterprise
boundary
Customer
interaction
From:
 Complete and proprietary
in-house capabilities from
research to post-marketing
 Push marketing oriented to
drive transactions
 Through new product
development by translating
science into clinic
 Portfolio diversification,
scale and market share
Value creation
Risk
management
To:
 Eco-system of collaborative
networks to cost-effectively
enable value chain
 Co-value creation oriented
to fulfill customer needs
 Through solution
development using a
systems design approach
 Risk-sharing by
orchestrating solution
partners and stakeholders
• Open platforms enabled by technology will shift the supply-side models for R&D, Manufacturing/
Supply Chain, Commercial and Medical – creating lower fixed infrastructure costs and displacing
existing barriers to entry i.e. enabling new-entrants to disrupt existing business models
Source: InnoAction Advisory
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8. Key trends in consumer-centered healthcare
Source: PSFK 2014
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9. Key trends in evidence-based medicine
Source: PSFK 2014
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10. Commodity diagnostics will shift from a centralized model to a
patient-centered decentralized model (I)
Source: PSFK 2014
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11. Commodity diagnostics will shift from a centralized model to a
patient-centered decentralized model (II)
Source: PSFK 2014
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12. Commodity diagnostics will shift from a centralized model to a
patient-centered decentralized model (III)
Source: PSFK 2014
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13. Commodity diagnostics will shift from a centralized model to a
patient-centered decentralized model (IV)
Source: PSFK 2014
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14. Commodity diagnostics will shift from a centralized model to a
patient-centered decentralized model (V)
Source: PSFK 2014
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15. Commodity diagnostics will shift from a centralized model to a
patient-centered decentralized model (VI)
Source: PSFK 2014
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16. Commodity diagnostics will shift from a centralized model to a
patient-centered decentralized model (VII)
Source: PSFK 2014
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17. Commodity diagnostics will shift from a centralized model to a
patient-centered decentralized model (VIII)
Source: PSFK 2014
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