Health 5.0: the emergence of digital wellness
Apple’s new watch comes with unique health features. Paired with AI-based software, it can predict high blood pressure and sleep apnea. Google-purchased artificial intelligence startup, DeepMind, is aiming at changing the way diagnosis and treatment are performed in hospitals. Amazon, with its secretive 1492 unit is — allegedly — exploring telemedicine applications, and — again, to be confirmed — received wholesale pharmacy sales licences in 12 US states, sending pharmacy stocks plunging a few weeks ago. Chan Zuckerberg Initiative is investing US$3B over the next decade to “to help cure, prevent, or manage all disease”. Bill and Melinda Gates Foundation, with their endowment of over US$40B, is the largest transparently operated private foundation in the world, with a focus on, you guessed it: healthcare. Oh, and Fitbit devices, used in over 480 academic studies so far, will be now used by 10'000 participants of the All of Us Research Program, under U.S. Department of Health and Human Services.
In case the pattern is not clear, let me make it explicit: the titans of the technology industry are focussing on health as the next industry to transform. And if you’re not sure what this may mean, just think how it was to be a customer of some other industries before they were transformed. Remember travel and hospitality (trying to book that room in Iceland in 1998)? How about news and media (newspapers were updated only once every 24 hours)? Photography changed as well (24 or 36 frames in your camera and “express” development in just one hour).
The health industry is about to receive a significant innovation push. It will progress toward the fifth stage of the sector: Health 5.0.
The fifth stage of the industry: Health 5.0.
There is a reason the future of health industry is called Health 5.0. In my team’s research, we have identified five stages that many, if not all, industries go through. See for instance our report on Retail 5.0, which outlines the five steps of evolution of the retail sector. It is possible that new stages will emerge in future, but so far we are aware of the following five.
Health 1.0: Production
In the first phase, an industry emerges. Individuals and organisations recognise the uniqueness of the services and products they offer and start to focus on providing consistent access to them.
The modern health industry started in the XIX century with the increased scientific focus, fuelled by advances in medical research, and amplified by improvements in public health and nutrition. We saw the emergence of practices, where patients could receive care. Evidence-based treatment became the focus.
In the first stage of the health industry, scientific advances allowed the survivability of patients to become the strategic differentiator between competing providers, becoming a proxy for quality of healthcare.
Health 2.0: Industrialising
In the second phase of an industry, industrialising, the focus shifts toward creating an ecosystem of partners, bringing them together, to provide better services.
In health, an example of such approach was the emergence of in-patient clinics and hospitals. The first hospitals, part of the trend of industrialising, emerged in late XIX century. Johns Hopkins Hospital, as one of the first such in the world, introduced then modern approaches, including rounds and residency. Hospitals were the early examples of focus on value chain integration in the health sector.
The second stage of the health industry, through value chain integration, allowed competing parties to differentiate by their responsiveness expressed as the end-to-end integration of patient-care services.
Health 3.0: Automation
The third stage of the industry focuses on automation of its activities — seeking productivity gains, improving efficiency and throughput, cutting cost and waste.
The equivalent of automation in health was the introduction of enterprise resource planning software, triaging patients, automated patient check-ins, software supporting practitioners in their usual activities. Health industry increased its focus on the operating models.
The cost to serve (the lower, the better) and efficiency (the higher, the better) became the strategic differentiators in the third stage of evolution of the health industry. Through lower costs and higher productivity, the services became available for more citizens, increasing the accessibility of health services.
Health 4.0: Digitalisation
The fourth stage of evolution of an industry is digitalisation. Beyond simple automation (where some aspects of the industry are digitised), digitalisation explores completely new business models and new types of customer engagement.
The equivalent of 4.0 in health is the introduction of new funding models (crowdfunding), the emergence of unique value propositions, such as digital therapeutics — apps that can be prescribed instead of drugs (showing some success in the behavioural health space). Effectively, in the fourth stage of the industry, health sector focusses on new and better business models.
The new strategic differentiator in health 4.0 is the uniqueness of services provided. Mass personalisation and proactive healthcare trends enable new entrants to thrive in the industry.
Health 5.0: Personalisation
The fifth stage recognises the core role of customers (beyond the “customer is the king” mantra) and flipping of the industry operational models toward adapting to customers’ processes. It is a mindset shift: from customer relationship management to customer managed relationships.
In the health industry, the fifth phase goes well beyond patient-centric healthcare, and gravitates toward customer-centric wellbeing services. In 5.0, health service providers are asking where they can fit in their customers’ lives, rather than the other way round (where can customers fit in providers’ processes). The focus is on customer models: genuinely understanding customers (not just patients!) of the healthcare industry.
The strategic differentiator introduced in health 5.0 is the lifelong partnership with customers, expressed as focus on wellbeing and quality of life of not just patients, but individuals who are often not even considered as customers of the health industry.
Health 5.0 will give rise to digital wellness. Participants of the industry will walk away from just treating patients, to ensuring lifelong partnerships with individuals, making treatment an exception, rather than a service that the industry is mostly associated with.
Digital wellness: efforts made to increase, maintain or restore physical, mental, or emotional well-being, delivered at a global scale through the use of digital technologies, rather than by individuals working directly with patients.
Make healthcare great (again)
If Health 5.0 indeed materialises, then healthcare, as we know it, should be renamed. In most cases, healthcare services are as reactive (as in responding to an emergency) as they can be. Even the dictionary definitions stress the “delivery of medical care” as core aspects of healthcare. But what if we indeed followed what the word says? What if we focused on caring for health? Health 5.0 will likely evolve in this direction.
Newcomers to the health industry (the tech giants), on top of focusing on lifelong partnership, customer models, and digital wellness, will most likely redefine the three most important aspects of the sector: health quality, responsiveness, and financial models recognised as important health system goals by the World Health Organisation.
Health quality
There is a reason 90% of doctors, if facing a terminal illness, would choose a do-not-resuscitate order — to avoid CPR, electric shocks or intubation. Similar numbers are seen among patients. Does it mean that the goal set in Health 1.0, survivability, is questioned by both patients and medical practitioners?
The digital giants may initiate a shift in focus from just survivability to the quality of life. They will likely flip the model: from trying to achieve as high numbers of “survivors” as possible, to reaching as low numbers of “admissions” as possible (without gaming the system by changing the admission rules). This requires a dramatic mindset change when it comes to thinking about the value chain in the health systems (the focus of Health 2.0). Where the value chains often currently start (general practitioners) will likely be the exceptional case, closer to the end of the value chain.
Looking for scale, the digital giants will likely want to open up some aspects of the health process and allow patients to “self-service”, where the currently available digital tools are sufficient for individuals not to require practitioners’ help. An early signal of such opportunities is https://www.patientslikeme.com/, where individuals can better understand their condition, as well as share their data with others.
While a basic level of health services (where traditional interventions are key) will likely remain unchanged, the pressure coming from other industries will trigger a massive soul-searching activity in the health sector. The new focus on digital wellness will open up new opportunities to improve quality of care.
Responsiveness
The digital giants will be the first ones to truly integrate health data from across all aspects of our lives, and build electronic health records of the XXI century. Just like Amazon understands that the key to succeeding in retail is to capture customers even before they think about shopping (“Alexa, I ran out of coffee beans, get me some!”), we will see similar focus in the health industry of the future. The sector will focus on addressing needs of patients even before they become sick. Wearable heart rate monitors can already detect stress levels, and there are suggestions — which still need to be scientifically verified — that they can recognise pregnancy and some health issues.
The proactive approach will boost the evolution of preventative healthcare, for instance through smart devices encouraging us to change our habits and therefore prevent adverse health scenarios.
As transformed industries often “spill” beyond their traditional boundaries, responsive health trends will impact other industries. We may see self-driving cars which, in case of an accident, will communicate with emergency services and share live data about the condition of their passengers, perhaps even triggering production of personalised body parts (bone replacements that are just the right size, such as those developed in Herston Biofabrication Institute).
We are still about to witness it, but we can be sure of one thing: the digital giants will help us redefine what “responsive healthcare” could mean.
Fairness in financing
The players in the digital economy keep surprising us with new business models. If there is one thing we can predict about future of the health industry, it is that many health services will become free of charge (just like our email, overnight delivery of online purchases, and video calls are), and for others, the financial models will change dramatically. We will see many more business models than those relying on outright payments, Medicare systems, or commercial insurance. Health as a service, subscription models, crowdfunding, are only becoming considered in the health sector, and customer expectations will drive the emergence of those new business models. Digital wellness will mostly remove geographical boundaries, allowing for greater competition among service providers, which will hopefully lead to better outcomes for patients.
And in an almost perverse twist of action, we will soon realise that the digital giants need us to stay healthy and productive: they will invest in us, making sure we are feeling well and making enough money to… spend them on products and services offered and advertised by them. This may sound shocking, but you consider that some of the largest organisations deal with a third of earth’s population as customers. If they don’t have any remaining market share to take from their competitors, the only option for them to grow their markets will be to ensure the wellbeing of the global population and its ability to spend.
We are witnessing significant changes and shifts in the health industry. The evolution is soon about to start looking like a revolution. With newcomers in the health industry, we will likely witness dramatic changes to healthcare as we know it. Will it be good for us, individuals? I sincerely hope so, but the jury is still out.
Listen to The Digital Week podcast to hear more about Health 5.0.
The Digital Week podcast is produced by the PwC Chair in Digital Econonmy at QUT. The conversation is facilitated by Monica Bradley and aims to make sense of the Digital Economy in 15 minutes.
