In the mid-1800s, prospectors flocked to the American West, hoping to find their fortune. Today, a similar phenomenon is occurring within US healthcare—companies outside the industry view healthcare as one of the few bright spots in an otherwise sluggish economy.
What makes the industry so attractive to new entrants? The current health system is fragmented with inefficiencies, creating opportunities for technological and other process improvements. PwC’s Health Research Institute (HRI) identified three primary opportunities: (1) online health information services, (2) alternative sources of healthcare services, and 3) products and services aimed at the 18-24 year-old demographic segment.1
Some companies already have taken advantage of these opportunities, entering the health industry in innovative ways. Consider that of the Fortune 50 organizations, nearly a quarter are traditional health industry companies. Almost another quarter have no direct involvement in the health industry. The remaining companies are part of a new lexicon coined by HRI: fixers, connectors, retailers, and implementers. (See Figure.)
Health industry involvement of Fortune 50 companies
Here’s how the new players will make their mark:
Fixers attack the health system’s parts that are dysfunctional, bifurcated, and unsustainable. These companies search for opportunities to improve processes to reduce costs and waste. Fixers’ work can strengthen traditional health companies.
Connectors succeed by linking information and technology across the health system. These companies provide meaningful analysis and context so that clinicians and consumers can make better decisions about health behaviors.
Retailers prosper in high-volume, standardized markets with low margins. Retailers use their deep customer relationships and ubiquitous access to serve new markets, such as primary care.
Implementers thrive on government spending programs, new regulations, and established industry standards. Implementers understand that the industry is converging, and they are able to work across traditional sectors toward the government’s aim to achieve a more integrated model.
1 PwC Health Research Institute, The new gold rush, 2011.