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Video22 Sep 2022

Healthcare: How Consumer Power and Data Are Forcing Seismic Change

Citi’s Adam Spielman takes a detailed look at the global healthcare system as empowered consumers and the data revolution drive the convergence of health, consumer and tech. The prognosis: almost every aspect of healthcare is facing fundamental change.

Citi’s report says the healthcare system – broadly defined – is going to change significantly in the coming years.

Consumers will exert greater pressure, partly because they are better informed about their own situation, and partly because they have become accustomed to rapid, personalized service in other areas like online banking.

And another fundamental driver is the “Data Revolution”. This is fuelled by the increase in granularity of health and lifestyle data on each individual, machine learning algorithms, and real-time communication to patients, their clinicians, and public health authorities. A third driver is the ongoing innovation in medical science – for example, the falling costs of “omic” data.

 

Source: Citi Global Insights

 

Many healthcare systems were already under strain thanks to their costs and inefficiency, but recently a number of new catalysts have appeared – Not only are healthcare systems increasingly expensive, they also focus on treating sickness, not preventing it. Several catalysts are accelerating change. Covid, for example, forced a reimagining of the system. An increasing amount of capital is being invested in disruptive start-ups. And in the U.S., change is also being driven by new federal regulations, like the imposition of price transparency and data interoperability, plus the move to value-based care.

Forces driving convergence of health, consumer and tech: The full Citi report showcases examples of this convergence. Consumer company skills are needed in health because of the importance of engaging with people in their everyday lives. Tech companies are also needed because they bring a relentless focus on data, machine learning, and rapid execution.

Several products are bridging the gap between health and consumer and tech. In the future, successful products will combine attractive physical design, simple-to-use software and advanced analytics. The way health is being delivered is also changing fast, with greater focus on patient convenience. Companies are using advanced data analytics to make sure they’re serving the right person in the right way at the right time. And Citi’s Spielman argues that the BioPharma industry will be deeply affected. AI will change drug discovery much more than most executives seem to believe; and better diagnosis of rare diseases will be transformative.

Keeping the transformation in context: The human touch is – and will remain – vital in healthcare. And a lot of what matters in healthcare, and possibly most of what matters, is driven by bottom-up specialty-specific developments, not the sort of top-down big picture changes on which the full Citi report focuses. Many aspects can’t be replaced by digital products. Furthermore, change happens slowly in healthcare. Clinicians are often conservative; incumbents benefit from the existing system.

Nonetheless, change looks set to accelerate: Consumers are different now because they are increasingly impatient with their health system. The power of data is also different, both in scale and because of advances in analytics. And there has never been so much capital provided to disruptive start-ups. In so many industries, digital has been a game-changer. Will healthcare really be so different? 

For more in-depth information on this subject, please see the full report here

Citi Global Insights (CGI) is Citi’s premier non-independent thought leadership curation. It is not investment research; however, it may contain thematic content previously expressed in an Independent Research report. For the full CGI disclosure, click here.

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