Editor’s Note: In the fall of 2022, GreenBook’s IIEX Health event took place in Philadelphia, bringing both useful and inspiration content to insights and analytics professionals spanning the healthcare, pharmaceutical, medical, and wellness industries. Attendees found the content so valuable that we wanted to make much of it available to all who could not attend this in-person event. Before even reading this post, know this: You can view all the sessions on-demand now!
If you aren’t in those industries … how might you apply the learning within your own? At GreenBook, we believe that IIEX is more than a conference series. It’s a mindset. These are the forums in which the most important insights innovations are revealed, demonstrated, debated, and championed. What starts at the events drive change in our world. It is in that spirit that we bring you, directly, some of the poignant content we heard at IIEX Health.
Finally … sign up here to receive updates on IIEX Health 2023!
Enjoy our On-Demand Video
Join New York University Professor Steve Andrzejewski with a talk about the changing landscape in the healthcare industry. Explore the constantly evolving industry and how pharmaceutical companies can participate in this changing landscape. Click to view the video (courtesy of Civicom).
View more 2022 IIEX Health content on-demand!
Whether you were able to attend, or you were not, join us online to see what was shared by some of the biggest brands, the newest startups, and expert-level researchers across healthcare, pharma, and consumer experience. Here’s just two of the amazing sessions you’ll find on-demand:
- Greg Hewitt and James Bauler speak to the innovation process behind Fuse Oncology, a spin-out of Cone Health, after a critical examination of the lag between a patient’s diagnosis and start of treatment.
- Zach Hebert speaks to how the Covid-19 pandemic has made it more important than ever to deliver the right message and how the right message can help ease the mind of vaccine hesitant parents.
Online you’ll find other fantastic sessions by speakers from Pierre Fabre Group, Novartis, Hinge Health, and more! If you want to stay on top of the trends in the healthcare industry — one of the largest spends in market research — you won’t want to miss IIEX Health On-Demand!
Not familiar with the Insight Innovation Exchange (IIEX)?
Ten years ago, GreenBook embarked on a simple idea: Could we create opportunities for market research leaders to share ideas and collaborate to define the future of insights?
If there was something new to our industry — a company, methodology, or platform — that didn’t exist 10 years ago and is now considered a “best practice” … well, you probably saw it first at an IIEX event.
What starts here will change our world!
Transcript
(Transcript courtesy of TranscriptWing)
Alexine Tranquada: All right. For our last presentation for the day, we’re so fortunate to have Prof. Steve Andrzejewski with us to talk about the changing landscape in healthcare. As we know, things are evolving so quickly, and how can pharma participate in this changing landscape. So thank you very much, Professor.
Steve: Thank you very much. Good afternoon, everyone. Oh, go back one. There we go, “The Changing Landscape of Healthcare,” There’s a lot going on, and at the end we’ll talk about how pharmaceutical companies will interact with that changing healthcare landscape.
Just really quickly on myself, I went to Hamilton College and played ice hockey. You’ll understand why I’m telling you that at the end of the presentation. Then I went to NYU Stern many years ago. I’ve been an adjunct professor there. I teach a course called the Business of Health and Medical Care to the Economics Department. I spent my entire career in the pharma/biotech marketplace. Healthcare represents, as you probably know, 20% of the gross domestic product. One of the things I tell my students right upfront is it’s obviously very complicated, but in the six-week course, one night a week, so there’s not a lot of time to cover a lot of ground. Here are some of the things that have either arrived or emerging that you should remember. As you go into the course, think about these things.
The first one, it shouldn’t be a surprise, “Follow the dollar and demonstrate value.” It’s not only pharmaceuticals. Many of you, I’m sure, are looking at digital health and all the activity that’s going on there. We know there was a lot of money that went into the digital health coming out of the pandemic. It was a trend that was accelerated. However, the last six months or so, obviously, broader economic issues, there’s a lot of the digital health investments gone way down. If you read about it, one of the things they have to do is they have to demonstrate value, right? Everybody does. If the digital platform sounds really good, if they’re not improving the current situation, it’s going to be challenging.
Consolidation. We’ve obviously seen that over the years with drug change, distributors. We see CVS and Aetna, and Cigna and CSI coming together. One of the things when consolidation occurs in any industry, you see the price points start to go up. We’ve obviously seen that in healthcare in general and, obviously with, more recently, inflation. Education. Obviously, the internet over the last 10-plus years has been a huge help as it relates to education. People can get information at their fingertips much more quickly than they used to. Obviously, we get bombarded with things like diet and exercise, diet and exercise, diet and exercise, but there’s a lot more that goes beyond that and other critical component to healthcare.
We just heard a little bit about consumer-driven healthcare and patient responsibility. Everybody has a role in the overall system. One of the things that I won’t cover today but that we talk about in my class is we compare the US system to other countries and how they handle healthcare. In socialized systems, everything is covered, but there are pros and cons to that, right? In Canada, you may have to wait six months to get an MRI. There is this concept of patient responsibility in the system. I’m not quite sure everybody in the United States thinks that way, but it’s important and we’ll see more of that especially as more of the money, more and more patients or people are given the choice to do high deductible health plans these days where you’re not paying as much in terms of the premium coming out of your monthly salary, but then you have a bigger chunk of money to go through your out-of-pocket expenses before your insurance really kicks
1.Part of that is the consumers have more control over where they’re going to use those dollars. Then, obviously, you have health spending accounts and flexible spending accounts. I came up with the word electronization of healthcare. It’s not all that easy to pronounce. However, electronic medical records, we all know, have played a much bigger role in medicine. It’s not that long ago that we had the manila folders, right? Ten-plus years ago, when you walk in a doctor’s office, manila folders everywhere. The Obama Administration gave incentives for doctors to switch to EMRs. If you talked to any doctors, as I’m sure you have, they’ll complain to this day how painful that was. I think it’s a better problem, EMR, than all the manila folders because I think there’s a better chance of measuring impact in healthcare.
Obviously, beyond EMR, we have a lot of digital health opportunities and places on the internet and other ways in which it’s impacting healthcare. Ethics is always important as it relates to healthcare and making decisions just to what is going to be reimbursed or not. There are always tradeoff decisions. Not everything is going to be paid. Then a big bucket at the bottom there, and I’m going to talk a lot more about this is new healthcare models. Big organizations like Amazon, Berkshire
Hathaway, and JP Morgan, I think you probably know, came together under Haven. Three major organizations in our country, and what happened? It’s disbanded. It’s another indication of how challenging healthcare is and the incentives are not always aligned across the system. General Motors with Henry Ford Healthcare System worked a little bit better. We just had the election about a couple of days ago, and people say politics are all local, right? The same thing to an extent with healthcare, this is a good example of it. It may be a little bit easier to deliver healthcare because it’s more regional.
Denmark is always high on the list in terms of how much money they spent in healthcare and what results they deliver. Well, it’s a smaller, more homogeneous group of people than we have by far than the United States. So another example that regionalization does make a difference. Hospitals started their own generic drug companies, Civica Rx. That’s been very successful. A number of hospitals felt they were paying too much money. So how do you get more leverage in the marketplace? It applies in healthcare as well. You get more volume and negotiate on price. It’s essentially what they did by creating their own drug company. A few of the others I’m going to get in here, involved here as we move forward.
So I’m going to go over a number of deals that occurred in the last couple of years in the healthcare space and try to give you a little sense as to why they potentially are doing this, but it will lead to the end of, “Okay. How does pharma fit in to all of these things that are going on in healthcare?” So, $13.5 billion UnitedHealthcare and Change Healthcare, UnitedHealthcare wanted access to Change Healthcare’s analytics and payment platforms and Change obviously is part of Optum. Clearly data, AI opportunities exist. FTC challenged this on some of that basis, but it has since passed. This occurred about a year ago.
Oracle and Cerner. Oracle gets access to a trove of healthcare info from Cerner. They didn’t have access to that before, $28.3 billion. Clearly, they see an opportunity here to fix some of the inefficiencies in our system. Again, that was from December of last year. Amazon. They’ve been quoted as saying, “Healthcare is high on the list of experiences that need reinvention.” I don’t think that should come as a surprise to anybody in this room. At the same time, we know Amazon has been pretty good at reinventing things, maybe not so great in healthcare. They put a bunch of effort forward. They haven’t all necessarily worked out. For them, the $3.9 billion is probably small in the big scheme of things. They bought One Medical. Obviously, that provides customer 24/7 access to virtual care. That happened in July of this year.
Earlier this week, you may have seen that Walgreens, in particular, their VillageMD group, bought Summit Health. For those of you who don’t know, Summit Health is Summit Medical Group, which is an integrated delivery network basically in the New Jersey area and also CityMD. That, I think, was around $9 billion as announced earlier. So, things continue to change, and all these different organizations are looking at where can they potentially add value and get a competitive advantage. Google. Another big name in business, right? They want to play in healthcare, too. $2.1 billion, that’s not that big of an investment for Google, but they’re investing in Fitbit. Can they make healthcare more accessible? Obviously, Fitbit is a wearable. You hear a lot more about wearables. Can they collect the right information that’s going to have an impact moving forward? That was announced in late ’19 but closed in early ’21.
You probably obviously have heard of 23andMe, and they went ahead and bought Lemonaid for $400 million. They want to make personalized healthcare a reality. Obviously, it’s genetics space for 23andMe. Instead of building a digital platform, they went out and bought one in Lemonaid. There’s a telemedicine component of that. We’re talking about that earlier today. That was October of last year. This one potentially is one of the big granddaddies of them all, $18.5 billion dollars. Teladoc bought Livongo, and Livongo is focused in diabetes. If you’re a pharmaceutical company, to me, you’d want to really be really studying how you fit into the diabetes equation given where this whole effort may be going. You may know that Glen Tullman was the CEO of Livongo. He started Transcarent where he’s trying to coordinate pharmacy care to have one-stop shopping, especially in diabetes. People get their insulin from one place. They get their other drug from somewhere else. A lot of this has to do with improving the customer journey, and that may trump the quality of a drug. If someone goes online and they’re enjoying and are able to get through what’s perceived and the difficulties of red tape in healthcare right now and can get to a point where they can get care and a drug that makes a difference, they may just be going with the generic drug. It doesn’t matter that there’s a new drug in the marketplace that is substantially better in some way, shape, or form.
Recently, USA Today did a survey; 68% of people want technology to play a bigger role in sharing real-time medical information with their physician. Fifty-six percent of people surveyed used a digital collection tool to monitor health. I think a lot of us probably monitor our steps on our iPhones. Obviously, it’s going way beyond that moving forward, again, another indication that consumers are going to control more of their healthcare moving forward. Psych Hub is just one example of many digital health platforms that are out there. They recently raised a fair amount of money. They have over 800 partners including J&J. It’s an educational resource for mental health, and it connects you to a doctor for a consult. To me, if you’re a pharmaceutical company in mental health, I’d try to really understand what’s going on in Psych Hub and many, many other mental health platforms that are out there.
Healthcare is changing drastically. You shouldn’t be surprised by anything that you see up there. It’s catching up to the rest of the world from a digital perspective, healthcare, but obviously with the pandemic, the pace of change has accelerated. We talked about data and how the simulation of that from an AI standpoint could really have an impact. Clearly, the more technology advances are improving things more quickly but will complicate things from a reimbursement standpoint as well.
Quickly, historically, when you look at the healthcare model, it used to be vertical: doctor, patient, pharmacy hospital. It moved to a more distributed healthcare across a number of different sectors, some that are noted here: imaging, behavioral health, rehab. Now, it’s really moving to a more connected model. Integration, I mentioned integrated delivery networks earlier. Integrated delivery networks are increasing their influence in the marketplace. In my experiences in pharmaceutical roles, they’re very difficult to sort of penetrate and get to the right decision-makers as it relates to what their efforts are so something to keep in mind.
A really important part is more proactive than reactive, right? Instead of treating sick care, how do we get ahead of the game and treat patients from a well-care perspective to increase value. I mentioned technology earlier. We know wearables, virtual health. All the things that you see up there, genomics, robots, 3D-printing are all continue to advance technology. It’s a similar question of how do they fit in?
Similar to a pharmaceutical, how do they fit in to the system, and where are they going to be able to add value and have a competitive advantage? One thing that I think is important to point out. You hear the word digital health over and over and over again. Is it really digital health or is it just health, right? I mean, do we call it like digital searching? Do we call it digital expense tracking online? No. We just call it what it is. So, it’s indicative that healthcare is behind the rest of the world as it relates to the digital platform and eventually, I think it’s simply going to be called health.
When you look at pharmaceuticals, when you look historically, we all know one of the first thresholds for success is you have to demonstrate efficacy and safety. Obviously, in more recent times, demonstrating value from an economic standpoint or however you wanted to find that, especially with payers and managed care organizations, to get reimbursement is critical. I’m going to add now another threshold: is how do you take both of those and where do you play in that healthcare space given all the trends and changes that are happening?
This slide is here because, in my experience, the pharmaceutical industry tends to move very slowly. I think you’ve seen that even from a digital health standpoint, a contributing factor to why it’s still maybe called digital health instead of health versus other industries. It’ll be interesting to see how things change over time, but I really think the pharma industry has to figure out where do they want to play. This is where the hockey analogy comes in, and why I mentioned that I played hockey in college a long time ago. How will pharma fit in? One piece of advice from the famous hockey player, Wayne Gretzky, “I skate to where the puck is going to be not where it has been.” I think that’s a good piece of advice for the pharma industry to be thinking about in this rapid changing landscape of healthcare. Thanks very much. If you have any questions, happy to take them. [Applause]
Alexine Tranquada: It’s so cool. Yes. We have a question in the back?
Female 2: Could you give your thoughts on how blockchain and EAOs will fit into this business that you have?
Steve: Well, I mean, I think it’s another form of technology that’s going to speed things up, but as things get sped up, you got to find where that puck is going as opposed to where it’s been. There are so many things changing so rapidly. When you look at the pharma and biotech industry, Boston, how many biotech companies are there? Some of them are maybe very well using blockchain in their efforts, but just getting to that Phase 3 trial and then approval is not going to determine success on its own, obviously. If there’s unmet needs, great, but it’s going to go away beyond that. I just see it as another form of technology that speeds things up.
Female 2: Can I just elaborate?
Steve: Yes. Please do.
Female 2: Do you think that pharma will end up adopting blockchain, or do you feel like it’s going to be an industry that’s going to end up being very resistant in this particular case like it has with everything else? Or do you see that there’s going to be a trend that you gravitate towards this decentralized, democratized data?
Steve: What Jonathan, I think, said in his presentation earlier was something along the lines of change happens, and maybe it’s slow at first then all of a sudden it takes off. Pharma is, I think historically, glacial change, and they’re probably in that boat as it relates to blockchain. Maybe you’re doing more at Novartis and maybe there’s more activity there. I think all of this becomes a competitive advantage, and I think in some cases, especially if you’re a smaller company that doesn’t have the resources to figure a lot of these things, they may be left behind moving forward. When you say blockchain, is it going to be some small to midsized pharma company that gets involved in blockchain to help them? Unlikely. It’s going to be the big pharma that has the resources to try and figure that out and understand where things are heading and how they fit into it.
Female 2: It’s okay.
Steve: Sure. Thanks for the question. Yes?
Male 1: You brought up a lot of the acquisitions that happened recently. Do you think that that’s part of a greater trend of things becoming more and more centralized in the healthcare industry, like in a few years it’s going to be big tech companies that are just running your email account and your healthcare and that kind of thing? Or do you think that there might be has a small [Unintelligible] access and small [Unintelligible] would there be an influx of more competitive – being that innovative and coming into that [Unintelligible] opportunity where it’s going to be very centralized?
Steve: Yes. I think it’s too complex and there are too many opportunities in the space for it to become ultra-centralized. I think there’ll always be a want of competition to keep that market forces going. So FTC looks at all these deals, and they’re not only looking at them. They’re looking at the one that I mentioned earlier with Amazon. They’re not only looking at it from a standpoint of healthcare. Because One Medical doesn’t represent that many patients in the big scheme of things, but they’re looking from data as well and how much data does somebody have access
1. I do think though those people that are ahead of the game in data and are learning from it are going to be able to make decisions that are going to position them for better growth than maybe companies have done. Yes?
Female 3: I would like to go back to the other question. With regards to Amazon and their purchase of One Medical, before they did the purchase, they had a different measure of where they kind of applied their Amazon-y kind of approach to everything that they do. “We’re going to fix healthcare,” and they continually did a lot of stuff that ended up failing because they didn’t have the connection with healthcare providers, with patients. They didn’t really understand the complexity of the relationship which led to the first group of [Unintelligible]. Given that and given that Amazon has been so successful from the areas [Unintelligible] unexpected failure, if Amazon can’t do it, if they can’t come in and really innovate in the space, what hope does anybody else have? If they’re not doing good there, what is one thing that somebody can do to actually make improvements, or is it really always going to be internal where the alliance now is pharma companies working, the hospital and payers, and it has to be a [Unintelligible] working altogether to make the change internally. Or can somebody external come in and do that?
Steve: Well, a couple of things. Amazon, obviously, has a lot of money invest and healthcare is clearly part of their strategy simply by 20% of GDPs in healthcare. I think they’re going to keep trying. They’re probably getting closer now that they have a provider component, but they’re not going to stop, right? They’re going to keep trying to figure it out. With that said, I don’t think they’re going to be like figured out so well that they become healthcare, right? I mean, it’s just there are too many components to it. It would be great for some of the systems. I think IDNs are part of that to maybe partner with some of these organizations. I think a lot of people are afraid of Amazon, too, though, right? I mean, they think that they are so strong that they’re going to figure out something that somebody else couldn’t, and then that organization would be at a competitive disadvantage. I tell my students when I teach this class is, “You’re getting your MBA. You want to get involved in business. What a perfect place to go in healthcare.” It’s really complicated. It’s fragmented and it’s inefficient. What does that spell? Opportunity, right? Lots and lots of opportunity. If you go backwards 10 years, we’ve learned a lot, and look at how far we’ve come even in terms of ordering things online and them having shipped – drugs online after a consult with a doctor were necessary and having it shipped to our house. The information that we learn online, oh my gosh. “My aunt has cancer. Okay. Let’s immediately go online.” You just think about how far even from 10, 15 years ago where we are now. We’ve made a lot of progress. Still a lot of inefficiencies and there are a lot of reasons for that. Personally, I think there’s discrimination in healthcare. I think there are obviously always access issues in healthcare. We’re much more complicated. Our society is based on freedom and capitalism, and others aren’t always in that situation. We’re not a homogeneous population. We’re treating a lot of other diseases, and we’re always looking to get the best technology, at least, a component of the marketplace. I think it spells opportunity even that I’m sort of in my talk here challenging the pharma industry, “Okay. How are you going to fit in?”
Even like one massive, big pharma company is not going to go in and change the world, but where do they fit in? Where is your spot in moving forward basis where you’re going to find success and competitive advantage? Thank you very much.
Alexine Tranquada: Thank you so much. [Applause] Really, I’m so grateful. That is our program for the day. I hope you all enjoyed it. I hope you all are taking home something that’s actionable or inspiring or simply insightful. We will be downstairs for the foreseeable future, so we will see you down there. Again, thank you all. On behalf of Greenbook and everybody on IIEX event team thank you so much for being here. [Applause] Oh and thank you to Lexi for being my trusted co-chair on this track. It’s great. Thank you. Perfect. [Applause]
