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Part 1: Healthcare Impact Trends

Posted Oct 16 2008 9:04am

It’s that time again—2009 strategic business planning and budgeting. This means product choices, operational moves, growth projections, and customer retention strategies. These are critical decision points that have deep implications for future profitability in an environment that everyone agrees will be a very, very tough 2009.

The futurity of these decisions need to be put in context of tomorrow’s complex marketplace. Internal strengths and weakness, consumer wants/needs, and competitive intelligence need to be wrapped in a framework of market trends and influencers. Following is a summary of ten healthcare “impact trends” to place on your strategic radar screen.

Economy – DUH! Lost jobs, foreclosures, Wall Street extremes, record consumer credit card debt and, a recession. Now for healthcare – decreasing benefits/increasing out-of-pocket obligations, health care stocks down by half since the beginning of the year, $2.1 trillion in healthcare spending, 48 million uninsured, and unsustainable government healthcare programs (Medicare, Medicaid). Yes, it’s the economy, stupid!

Politics – Three months ago, Harry & Louise showed up again backed by a diverse, non-partisan coalition buying media time for a national message "Whoever the next president is, healthcare should be at the top of his agenda, bring everyone to the table and make it happen." The two Presidential candidates each put forth comprehensive programs for healthcare change. That was then. Now, it’s not going to happen – there’s no money left!

Retail – Over 800 retail clinics have popped-up in pharmacies, supermarkets and big-box stores. Projections have these nurse-practioner staffed clinics reaching 2,500 in three years. There are 5,000 urgent care centers (staffed by physicians) and 55,000 pharmacies. Blues Plans have opened store fronts selling a range of health insurance products. And, the Internet has become a healthcare shopper’s paradise offering durable medical equipment, home testing/monitoring devices, and an array or insurance plans.

Medical Travel – It started as “medical tourism” — get a face-lift in Argentina, recover by the pool. Last year, 750,000 Americans traveled out of the country for medical procedures. This is expected to double next year and by 2018 over 15 million consumers will make up the medical travel industry. Over the next few years, this trend is expected to take $68 billion in revenues away from U.S. healthcare providers.

Medical Home – Chronic conditions take $3 out of every $4 spent on healthcare. Eighty percent of seniors have at least one chronic condition as do 60% of boomers. The ability to identify, treat and manage costly chronic care is accelerating the emergence of the “medical home” — a patient centeredness approach to providing comprehensive primary care that is accessible, continuous, family-centric, compassionate, and culturally effective.

Biotech – Pharmaceuticals, nutraceuticals and cosmeceuticals are a $400 billion industry. Enter Genomics. Americans can now order at-home genetic test kits to learn whether they have genes predisposed for cancer, Alzheimer’s, baldness or bipolar disorder. The premise is centered on personalizing consumer care, creating predictability in disease and condition management, and being proactive about prevention.

Information – It’s everywhere. We are tethered to our friends and family. Social networks such as Facebook, Twitter, Linkedin and MySpace are redefining “community.” In healthcare, physician accessibility has opened-up with 24/7/365 teleconsultation and e-advisory services. Home telemonitoring, e-prescribing, condition-specific social networks and Personal Health Records are the future of healthcare in the U.S.

Customers – Whether formulating a marketing plan, reengineering product communications or forecasting budgets, you can't do it without customers. Successful enterprises have moved away from "all things to all people" customer strategies. They’ve built products and services tailored to unique needs of each customer group based on demographic, psycho-demographic and generational factors.

Health Squeeze – The “where, when and how” medical care is delivered is changing. Health benefits and responsibilities are shifting. A quick scan of personal healthcare and financial choices leave a big unanswered question – what do I do? Concierge medicine, changing benefit plans, home care, lifestyle enhancements, inter-generational pressures—it’s intimidating and confusing. There’s a healthcare squeeze upon us and it promises to get tighter.

Health 3.0 – Over 150 million people use the web to gather information and make purchase decisions involving their healthcare. Three principles characterize Health 3.0—information technology grounded in web-based connectivity, personalized health care delivered in clinically relevant settings, and financing mechanisms embracing consumer-centric business models. It translates into an activated consumer with any time / any place / any device connectivity accessing an almost bottomless information reservoir, with the confidence and savvy to put it to use.

Within this contextual perspective, coming next month – Part II: Tactical Action Steps

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