Tag Archives: HCIT

Healthcare Companies Sitting On Lots Of Cash…What Will They Do With It?

In the September 8-15 edition of Time Magazine, they have a whole article about data and numbers.  One of the pages is on which companies have the most cash.  Apple is number one and the one you always hear about.  As we’ve all seen, there are lots of rumors about Apple, Google, and Amazon and what they’re doing that is health related. 

At the same time, I was intrigued to see all the health related companies on the list:

  • Medtronic – $13.7B
  • Abbott Labs – $8.1B
  • Merck – $27.3B
  • Pfizer – $48.8B
  • Johnson & Johnson – $29.2B
  • Abbvie – $9.9B
  • Eli Lilly – $12.7B
  • Amgen – $23.1B
  • Bristol-Myers Squibb – $8.3B

You have several other non-healthcare companies which are doing things in healthcare that are also on the list:

  • Walmart – $8.7B
  • GE – $14B
  • Procter & Gamble – $8.5B
  • Qualcomm – $31.6B

If you look at the Rock Health recent report, you can imagine how these companies could leverage all this money to really change healthcare.  They could fund companies.  They could buy companies.  They could invest in orphan drugs.  They could create new technology standards.  They could educate consumers.  They could push technologies like the Internet of Things. 

Applying Technology Trends to Healthcare

McKinsey recently put out their 8 technology trends article (access available with free registration). I thought I would translate those to the topic of healthcare communications. Hopefully, we don’t have to be hit by a bolt of lightning to change, but we realize and can document the ROI of acting now and improving our system by involving and reacting out to patients.

  1. Distributing Cocreation – This is the trend which is happening in many industries where consumers (patients) and suppliers (providers) are taking more involvement in product design and even advertising. New media and technology have enabled this to happen. This is a big opportunity for healthcare. In general, I see companies doing focus groups, but not letting product design be driven by the consumer. I don’t see competitions to design the next advertisement for a managed care company happening today.

“By distributing innovation through the value chain, companies may reduce their costs and usher new products to market faster by eliminating the bottlenecks that come with total control.”

  1. Using Consumers as Innovators – This conceptually seems similar to the first trend although there are likely more differences than semantics, but the value remains in letting consumers push healthcare. How do we capture what they want and the value associated with it? How do we create business models that allow companies to exist to provide that offering? It’s not easy for individuals to drive innovation since we are often tied to what we know.
  2. Tapping Into A World Of Talent – For the past few decades, many other industries have focused on getting their executives to gain multi-cultural experiences by working globally. There have also been studies that link innovation to diversity. With the exception of pharma, most healthcare companies aren’t global. Sure, all the big companies look outside the US for models and occasionally to sell to the government entities, but not much has taken off. The primary expansion in leadership that I have seen over the past five years is a lot more healthcare companies recruiting in executives from non-healthcare companies which will create some diversity and bring a new perspective to the table. Interestingly, I think this also is an issue in the patient outreach process. Are your communications taking into account the diversity of your patient population – e.g., language, messaging, channel, speed of voice?
  3. Extracting More Value From Interactions – This is very true for healthcare. I would bet that the majority of communications in healthcare are either reactive (you call them) or required by regulatory issues (e.g., explanation of benefits or annual notification of change). These programs were originally designed to cost as little as possible so that someone could check the box. Well, guess what. Over the past few years, companies are realizing that these communications are their best ability to influence patients. So, what are the “golden moments” that exist where an interaction can drive loyalty, satisfaction, wellness, etc. Companies need to figure out what the potential value is and how to capture it.
  4. Expanding The Frontiers Of Automation – Automation has been a focus for years. Healthcare is not an exception expect people struggle with how to provide care and a personalized experience while leveraging automation and technology. And, now with technologies such as web services, companies can be interlinked and automated which (when done right) can improve the consumer’s experience. Of course, the second challenge is that automation is best when it enables a process and people don’t often think, manage, or operate from a process perspective.
  5. Unbundling Production From Delivery – I think the whole concept of unbundling could be very interesting given consumerism. Unbundling has already happened for the corporate buyer…they can buy health insurance separate from pharmacy. So, could I (the consumer) one day buy long term insurance separate from prescription coverage separate from my provider network separate from customer support. Could I choose my disease management company? What would that mean for group discounts, bulk purchasing, underwriting models, etc.?
  6. Putting More Science Into Management – We are a lucky generation in that we have access to reams of data and information. Of course, the challenge is how to turn this into intelligence and use it. It is easy to get overwhelmed and frozen. But as managers, using information applying algorithms, linguistics, and neurosciences to it to create personalized communications that apply to each micro-segment of your population is a great opportunity. It translates success from luck to predictable outcomes.

“From “ideagoras” (eBay-like marketplaces for ideas) to predictive markets to performance-management approaches, ubiquitous standards-based technologies promote aggregation, processing, and decision making based on the use of growing pools of rich data.”

  1. Making Businesses From Information – Healthcare has long embraced this trend. There are numerous companies (e.g., IMS) which are built around information. There are clinical companies that produce drug monographs for use by clinicians. There are aggregators of information (e.g., ePocrates). The point is that companies not only create data exhaust, but as they apply decision sciences, they become consumers of more and more data.

“Creative leaders can use a broad spectrum of new, technology-enabled options to craft their strategies. These trends are best seen as emerging patterns that can be applied in a wide variety of businesses. Executives should reflect on which patterns may start to reshape their markets and industries next—and on whether they have opportunities to catalyze change and shape the outcome rather than merely react to it.”

These seem like reasonable trend predictions that are applicable generally and make a lot of sense form a healthcare perspective.

Scary or Interesting Technology

After my post the other night about analyzing your writing, I had a chance to talk with a technology company about how they digest and use text from things like letters, e-mails, and call recordings.  It was fascinating.  They were describing to me a system they developed for the military which is now available commercially.

They can take all these communications and use them as part of a segmentation or targeting model that is based on patient behavior.  How great (and scary) would that be?  (Big Brother is always watching.)  Imagine that you have a model that tries to identify how to best incent a person to improve their health.  If you could input any e-mails or letters they have sent into your company and input any call recordings using speech to text, you would have all types of indicators about personality and interests along with communication modes, time of day that they respond to information, etc.


Obviously, a patient-centric healthcare model means really understanding things about people.  To do that, we have to get multi-dimensional and think differently.  Rather than simply focusing on moving people to mail order from retail, shouldn’t you focus on attracting the people that are most likely to stay with it and not move right back?  If you are going to offer an incentive for taking a Health Risk Assessment, don’t you want to offer it only to the people that will act on the results?

Compliance with prescriptions or testing is a great example.  There are certain people that are more inclined to stay compliant.  But, it is also important to understand what message will motivate them to stay compliant – not dying, seeing their kids get married, saving money, not missing work, etc.

And, because we are in healthcare, there are some legal constraints about when you can make different offers within the same or similar populations.

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