One of the biggest changes to markets in developed economies is the way in which technology has facilitated the growth of platform businesses. This is a shift from the traditional linear value chain where there is a pipeline with a step-by-step process for creating and transferring value with producers at one end and consumers at the other. So with pipeline models, a firm design a product or service, the product is manufactured, offered for sale and a mechanism is in place to deliver it. Finally, a consumer then turns up to buy the product or services.
With a platform model, there is a much more complex relationship between producers, consumers and the platform itself. There is a flexible process of connecting and conducting interactions with one another, using the resources provided by the platform. In these instances, value may be created, exchanged and consumed in a wide variety of ways, made possible by the connections that the platform facilitates. There are a number of reasons for the success of platform models including:
- They can scale more efficiently because the historical gatekeepers (e.g. editors of publishing houses) cannot always act quickly enough for changing market needs (e.g. as can the Amazon Kindle platform)
- They are not constrained by supply (e.g. AirBnB does not own any property) so growth can be much faster as it is no longer constrained by the ability to deploy capital and manage physical assets
- Technology offers data-based tools for feedback loops which are typically very effective in managing quality of the offerings and reputation of the service
- The firm is inverted to be much more outward focused so it moves from being limited to in-house experts to something where there is a much wider set of independent participants on the platform.
So what are the opportunities for healthcare in this field? We believe that there is huge potential. Pharma companies are increasingly under pressure to diversify from the provision of drug treatment to helping to ensure positive patient outcomes. This is a radical departure which requires a new set of skills with behavioural science at its heart. Why? The reasons include:
- Much of the challenge for positive patient outcomes is behaviour change – and to achieve this requires an understanding of the psychological barriers and drivers to adopting new behaviours
- Technology is offering new possibilities to mediate the relationship between brands, HCP’s and consumers – which means that there are fundamental changes to the psychology of decision making by the different stakeholders. We, therefore, need to better understand the psychology of this
- Data is being generated that offers new psychological insights. New skills will be required by integrating behavioural science with data analytics to help leverage this
Healthcare companies have not yet fully embraced the platform model. So within the Connected Health model, technology is typically used for gathering data (e.g. reflected in AZ’s purchase of Umotif) and delivering interventions/care. But there has not been any real focus on the way in which technology can provide a platform where there are a variety of participants working together to share value, specifically:
- Technology providers: Offering their tools for use by patients who can then use them in a wide variety of ways. Some of these will be ‘off the shelf’ tools such as Alexa whilst others may be created by technology providers specifically for healthcare (e.g. Apple Health) or the disease area (e.g. the app Diabetik)
- Behavioural science providers: These may work in collaboration with technology providers or indeed may want to offer a non-tech solution
- Design agencies: These types of companies are increasingly involved in the development of behaviour change solutions that they may want to explore in a live environment
- Patients themselves: Who will try different interventions, selecting those that appear to be useful and relevant for them (not least based on the feedback mechanisms of others)
We believe that there are huge opportunities for HC brands to adopt platforms in this way to deliver enhanced patient outcomes. In this context, platforms offer a key role for:
- Connecting the different solutions providers with the patient community
- Providing mechanisms that track behaviours (e.g. who has signed up for which solution and measuring subsequent behaviours)
- Creating feedback mechanisms – both self-report but also through the tracking mechanisms the community members will be using
This business model is consistent with the broader changes within healthcare that are seeing sweeping changes towards consumerisation. There is a much greater recognition we are entering an era of highly individualized products and as such, it is hard to meet the increasing demands of this newly empowered population.
Not only do new business models urgently need to be trialed to understand how to capitalise on these fundamental market changes but there needs to be a much greater discussion about how to integrate behavioural science, data science, and patient insights.