Demographic change is increasing demand for healthcare. Worldwide, the number of people older than 65 is expected to double by 2040, and, accordingly, one third of jobs created in the US between 2016 and 2026 are expected to belong to the healthcare and social-assistance sectors.
Businesses eager to claim shares of the market are entering the sector with fresh ideas and technology. Amazon is one of the biggest names on the media’s lips. Though reticent regarding its plans to disrupt healthcare, Amazon has signaled multiple intents. It has already begun cultivating a business selling medical supplies directly to healthcare providers. It has hired a research and business team to specialize in pharmaceutical markets. Its AWS cloud services have been rendered HIPAA compliant. And it recently announced an initiative to better manage its 800,000 employees’ healthcare costs, creating a rich, in-house testing ground for health-management strategies.
Other areas of the healthcare landscape face similar disruption. Uber is staking a claim in medical-transportation markets. Provider systems continue exploring shared-savings arrangements called accountable care organizations, working with Washington bureaucrats to find sustainable business models. New insurers like Oscar are attempting to offer modern-feeling insurance plans with optimized provider networks. Industry stalwart UnitedHealthcare has begun rewarding physical activity with up to $1460 each year to spend on eligible medical expenses. Many market experiments will fail, but some will pave the way for real change in healthcare.
In such a dynamic business and policy environment, research is a pillar of successful adaptation. And healthcare businesses need new ideas now. Health insurers, for instance, have one of the lowest collective Net Promoter Scores of any industry, finding themselves seated at the same table as common consumer punching bags, like internet and TV service providers. Healthcare provider systems, likewise, are now knee deep in a long-percolating dialogue about transitioning from quantity- to quality-based compensation, wherein consumers pay to be cared for and it’s left to providers and other risk holders to eliminate waste and remain profitable. This means, in the years to come, provider systems must identify brand messaging that (somewhat counterintuitively) accommodates attempts to reduce interactions with consumers in the name of efficiency, nudging patients to view less interaction—for example, shorter inpatient stays, fewer elective procedures, and more telehealth care —as indicative of quality rather than parsimony.
The challenges abound, and it’s tough to know the route forward. One informative case study is unfolding in the flyovers. Utah’s Intermountain Healthcare and its integrated insurer, SelectHealth, have positioned a $2 billion cost-cutting, value-first initiative as a way to save members money, cap annual premium increases, and align the system’s ethics and incentives. But walking that path hasn’t proven easy. Intermountain has been heavily criticized by its community for outsourcing 5% of its workforce in the name of cost savings.
More than anything else, Intermountain’s story exemplifies the complexity of each healthcare player’s business context, and the deep need to stay informed when navigating change. For organizations sufficiently proactive and well-resourced to invest in innovation or system-wide change, there’s an excellent case for primary research that captures the voice of consumers. People’s barriers to adopting innovations are numerous and idiosyncratic, especially regarding something as personal as health. Up-front research has the potential to generate significant time and cost savings downstream. But it’s not about performing a single consumer study—it’s about orienting the innovation process toward consumers by consistently investing in understanding them.
It’s a 3-trillion-dollar market (and growing). Firms that avoid research will do so at their peril.