Alina Lavrentieva is a partner in PwC Russia’s Tax practice and the Pharmaceutical and Life Science Industry Leader.
Published on 23 November 2020 by Anna Andriyanova
The COVID-19 pandemic is not merely changing one aspect of the health system, such as a new discovery or approach to public health; the crisis is “editing the DNA” of health systems around the world by accelerating what we call the New Health Economy (NHE). The NHE is the transformation of health systems into a modular ecosystem of delivery, innovation and wellness more closely tied to the consumer.
For five years, PwC’s Health Research Institute has been tracking the progress of this transformation, which has largely been incremental. The novel coronavirus is rewriting the rules of the system so quickly that every health organization will have to adapt so it can emerge stronger in a post-pandemic New Health Economy.
Companies that do so likely will be those that respond quickly and decisively to market shifts; place offensive bets on innovative experiments now; develop a clear post-COVID capability development agenda; and take this opportunity to transform how they work. This is not a time to go back to the old ways of delivering healthcare. This is a chance to reboot and create a new strategic identity for the future.
The pandemic has accelerated forces like telehealth, rapid regulatory change and new delivery mechanisms driven by workforce changes. New, emerging forces have the potential to continue the remake of the health system, such as the importance of addressing the social determinants of health and the rise of resilience as a core component of business processes.
The COVID-19 pandemic will likely accelerate:
• Virtualization of health
• Analytics-driven modeling, scenario planning and platforms
• Healing the links in the supply chain
• Reprioritization of social determinants
• Reframing risk
The virtualization of health: Accelerating beyond telehealth to virtualizing diagnostics, delivery, therapeutics and innovation
Many of the services that have been performed in a clinic, hospital or doctor’s office may need to be done remotely or at the consumer’s home. Innovations around diagnostics, point-of-service care and mobile care also could shift many services from traditional care settings, and providers will need to find new ways to make up this revenue. Those services that may be performed in a clinical setting will also look very different. Remote diagnosis, for example, will have implications for how pharmaceutical companies support physicians’ needs, such as how to give a patient a drug starter kit. The touchless concept, an emerging model in retail, may shift healthcare into care experiences that reduce the need for touching surfaces or other human beings. Finally, perhaps the consumer-centric movement will fully take hold, in which the consumer in her home is at the center of the experience. Virtual health is an opportunity to shift from the traditional episodic model of care to one that is continuous and engages consumers when they are not directly interacting with the health system. Had a continuum of care model been in place when the pandemic hit, health systems might have had the ability to proactively engage high-risk patients virtually rather than cancel appointments.
Analytics-driven modeling, scenario planning and platforms: Building data and analytic capabilities to digitally connect consumers and health providers with resources
In the New Health Economy, data analytics and data insights are a key platform to help deliver the right care at the right time, at the right place and to the right person. The pandemic laid bare the challenges faced by the world’s health systems to collect accurate real-time data, model scenarios and ultimately make decisions on where and when to place resources. Infection curves, mortality scenarios, and need estimates for ventilators and personal protective equipment were in short supply in the early stages of the pandemic.
The need to invest in analytics, fueled by a seismic shift in consumer demand, will likely see the emergence of platform focused health companies that attempt to be the digital front door to the health system. Health systems, payers and pharmaceutical and life sciences companies are being asked to invest in these leading-edge platforms, with significant uncertainty over return on investment, and often in areas that are not traditional strengths. With this demand also come privacy and cybersecurity risks that should be closely managed. Payer, provider, and life sciences executives agree that ensuring cybersecurity and privacy is the largest barrier to digital strategies.
This may clear the ground for new entrants with deep pockets, a high risk appetite and the required consumer trust to partner or step in and help enable and orchestrate these experiences. We could very well see new virtual health or retail-focused players begin to orchestrate consumers’ care experience in a larger way (and capture a large chunk of value). A similar trend will likely play out in the traditional health delivery system as more consumer focused and cost-efficient solutions are developed to respond to short-term financial pressures and longer-term consumer experience opportunities.
Heal the links in the supply chain: Rethink supply chain resilience and strengthen through collaboration
The pandemic has revealed one area of neglect in the New Health Economy: the global web of interconnected nodes for the movement of drugs, medical supplies, technology and innovation.Life sciences and health companies can build a stronger, more agile and more resilient supply chain, one with more focus on multiple nodes for supplies and inputs that can help reduce risk from natural disasters, pandemics and disruptions. The ability to collaborate quickly likely will require information sharing and investments in relationships with other parts of the industry, nongovernmental organizations and governmental entities.
Reframing risk: Risk shifts that move at the pace of viruses and technology innovation
The New Health Economy was already wrestling with how governments and policy bodies create an adaptable regulatory framework. The challenge has often been technology and innovation outpacing regulatory change. The pandemic has revealed another gap: the pace of viruses, which requires a quick response and often with limited information. Opening or shutting commerce, tracking and tracing people, opening new supply lines, expanding the scope of practice for clinicians and paving the way to quick drug approvals are decision points that should have had close collaboration between government and the private sector, and many were not prepared.The economic impact of COVID-19 in some systems has already moved significant healthcare risk from consumers, employers and private insurance and into the government. As COVID exposes the high costs of some healthcare systems and systemic inequities in care access, calls for government intervention and policy changes should only grow louder.
Reprioritization of social determinants: Moving social determinants of health to the front door of healthcare
Increased stress, lack of exercise and reduced access to nutritious foods were issues that spiked for consumers during the pandemic. Feelings of isolation and loneliness became one of the leading social factor affecting health.These were also challenges that could not be totally solved by health systems. The chasm between social service organizations and health organizations widened during the pandemic and laid bare the need for new priorities and resources. Governments and health organizations, including the pharmaceutical industry, must have the capability to interact with people and their communities directly.