A battle over establishing trust and influence with patients and consumers is raging in healthcare. This was a topic that underscored many of the thousands of Zoom meetings among investors and industry insiders that took place this week surrounding J.P. Morgan’s 40th Annual Healthcare Conference. Like last year, the meetings were virtual, but the investment that will drive healthcare forward is very tangible.
The ongoing trend of consumerism and the use of technology in healthcare is the context for this competition. Patients have more choices in healthcare, more access to information about their health, and more options for managing cost-related risks than ever before. But that doesn’t necessarily mean all patients are healthier, more knowledgeable, or better served. It’s the conundrum driving everyone in healthcare to improve how they engage with their patients – and, ideally, be the first to do it effectively.
Providers – doctors – want superior patient engagement to improve outcomes without creating greater technology and administrative burden. Payers – insurance companies – want better patient engagement that helps control costs while improving quality and member retention. Also in the fray are life sciences companies vital to developing new treatments and therapies that require robust and ongoing engagement with patients, providers, and payers alike, both for the clinical trial process and to ensure the use and sell through of their products.
To achieve that engagement, these three healthcare industry segments need to parse through enormous amounts of information quickly, accurately, and cost-effectively, while protecting patient privacy. Investors are increasingly aware that data-driven, decision-making insights generated by AI analysis is the way to do this best in order to give leaders the intelligence they need to act amid fast-changing conditions.
In addition, AI-enabled solutions can help companies execute as an aging population drives growth in Medicare Advantage, as well as demands for better, more coordinated care. Data-driven AI solutions can also help providers and payers contain costs by fostering transparency in pricing and outcomes across care pathways. Lastly, AI and data technologies are poised to revolutionize life sciences drug discovery and treatment processes, especially via clinical trials that can now access much larger patient pools for research.
Executing on growth
As JPM’s (virtual) attendees and other investors know, a string of innovative newly public companies reached enormous valuations in early 2021 on the promise of capitalizing on the steady increases in Medicare Advantage plan enrollment and the value of more coordinated and technology-enabled care. But many of these emerging companies in the next-generation provider and payer segments – like Privia Health, One Medical, Clover and Oscar – have exhibited growing pains on the path to their much-hyped visions. Many are now trading at a fraction of their prior highs and below their opening IPO prices. At the same time, the entrance of these new competitors and increasing consumer demands have also challenged the established leaders in these healthcare markets.
Of course, healthcare is a difficult space, particularly for new entrants. The complexity and depth of healthcare data and regulations tied to its use have revealed that new entrants and established players alike need more robust and resilient technologies, processes, and systems to accomplish the highest goals that they set out for themselves. Creating these advanced tools on their own, however, is near impossible. They need configurable solutions that integrate quickly into their workflows with minimal friction and training, deliver incremental solutions to problems that impede growth today, and most importantly, learn from their experience over time to identify new solutions to potential issues they might not have even yet recognized.
Hope for the future
A few years ago, these solutions and the needed data to power them were extremely hard to find. Today, however, AI and machine learning have advanced significantly while progress in data interoperability and security has also advanced. We expect significant adoption of the kinds of out-of-the-box solutions that yield analytics and insights that would have required teams of data scientists not so long ago.
Providers, payers, and life sciences companies have a lot of room for growth using AI, and investors participating in JPM will continue to focus on companies that recognize this and act on it. The software leaders developing these solutions will exhibit hyper-growth in the coming years, and the healthcare industry leaders that adopt such technologies will outpace their competitors by driving better outcomes for their patients and members.
Photo: DrAfter123, Getty Images
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