healthcare Archives - Page 2 of 13 - Everest Group

life sciences digitalization

Everest Group Identifies Pharmaceutical Firms Leading the Way in Digital Effectiveness | Press Release

By | Press Releases | No Comments

Adoption of digital is creating a new pecking order of technology savvy life sciences firms led by Astra Zeneca, Johnson & Johnson, Novartis, Pfizer, Roche and Sanofi.

Fewer than 15 percent of all life sciences transactions signed in 2015 had an element of digital services in their scope; nevertheless, digital technologies are the pivotal driver for life sciences companies as they restructure to become leaner and pursue agility in operations to drive new product development, according to Everest Group, a consulting and research firm focused on strategic IT, business services and sourcing.

To illustrate this point, Everest Group profiled 15 global pharmaceutical companies regarding their digital functionality and business impact. In “Life Sciences IT Industry: An Assessment of the Market Opportunity and APEX MatrixAssessment,” Everest Group identifies Astra Zeneca, Johnson & Johnson, Novartis, Pfizer, Roche, and Sanofi as industry leaders.

This new research from Everest Group indicates that the key market trends driving digital adoption include the rising number of “born digital” healthcare consumers, the need for operational efficiencies and cost optimization, and the movement towards data-driven, personalized, evidence-based medicine.

The life sciences industry’s data-rich environment (including scientific, clinical and operational data) coupled with its many market challenges make analytics a key lever to provide real-time, actionable insights and improve operational efficiency. Analytics presents value in three key areas for life sciences organizations: cost reduction, top-line growth, and risk and compliance management.

Driven by the focus on analytics and infrastructure services, recent life sciences ITO deals focus on datacenter, end-user computing, and databases/middleware services, as well as application, development and maintenance (ADM) and enterprise resource planning (ERP).

“Most of the 2015 IT outsourcing contracts in the life sciences that did include digital services, did so as an add on to existing contracts, with a focus on remodeling existing ADM agreements,” said Jimit Arora, partner at Everest Group. “Digitally native contracts in life sciences are still a rarity, but we will see an increase in these contracts in the future. In fact, the adoption of digital is creating a new pecking order of technology savvy firms, with those that successfully use digital technology to both drive internal operations and customer-focused channels—i.e., digital for efficiency and digital for growth—leading the way.”

Other key findings:

  • Market imperatives to drive 12 percent CAGR growth till 2020. The life sciences industry is in a “recovery phase” as it grapples with a multitude of challenges that are stifling R&D efficiency, changing the portfolio mix and increasing M&A/restructuring. To address the challenges, market participants are adopting technology as a means to enable quicker product development, better consumer connections and significantly improved time-to-value.
  • Growth is a key driver of digital investment. While efficiency and enablement of digital are aspects gaining primacy, the life sciences industry is focused on driving growth via digital channels, consumer engagement, and healthcare ecosystem collaboration.
  • Analytics and cloud are aspects that will drive most digital investments in the short term. When it comes to enabling a cohesive digital strategy, organizations are going to extensively leverage hybrid cloud models and focus on analytics (both prescriptive and predictive) to get to outcomes quicker

*** Download Complimentary, Publication-Quality Graphics Here ***
High-resolution graphics illustrating key takeaways from this research can be included in news coverage, with attribution to Everest Group. Graphics include:

  • The changing value proposition in life sciences global services
  • On- and nearshore delivery on the rise in life sciences IT
  • IT opportunity in the life sciences industry
  • Digitization in life sciences IT contracts

Lessons from the Dark Side of the Healthcare Industry: Spotlight on Theranos | Sherpas in Blue Shirts

By | Sherpas in Blue Shirts | No Comments

The ongoing saga of Theranos reached a nadir last week when Walgreens decided to terminate its relationship with the once-hot healthcare start-up looking to transform healthcare diagnostics one blood test at a time. For the uninitiated, Theranos claims to have developed a highly disruptive means of conducting blood tests, wherein it could quickly process more than 240 lab tests, ranging from cholesterol to cancer, with just a finger prick of blood. However, these claims have come under immense public and regulatory scrutiny, following an investigative article in the Wall Street Journal last year.

In this day and age, when start-ups are the new conglomerates, revered and reviled in equal measure, this suspicion would typically not lead to such outrage, But Theranos is not an ordinary start-up. Its story was written in start-up heaven. It touted a path breaking innovation that could have revolutionized the field of healthcare diagnostics. In 2014, it raised over US$400 million, and was valued at $9 billion, with 50 percent owned by its enigmatic founder CEO – Elizabeth Holmes – a dynamic entrepreneur who has modeled her persona on Steve Jobs. Her own star rose with the fortunes of Silicon Valley’s latest unicorn. She was ranked 110 on the Forbes 400 in 2014, and topped Forbes magazine’s list of “America’s Richest Self-Made Women” in 2015 with a net worth of US$4.5 billion. On June 1, 2016, Forbes revised its estimate of Holmes’s net worth… to zero. Theranos is now being investigated for fraud, facing possible federal sanctions, a criminal probe, and imminent class action lawsuits. Regulators have proposed banning Holmes from her company for two years.

There are lessons aplenty from this topsy-turvy tale. Given the scale and pace of innovation required to transform the U.S. healthcare ecosystem, it’s valuable to take a look at key learnings from the Theranos saga.

When just a Minimum Viable Product (MVP) won’t do

Theranos used finger prick blood samples to conduct tests. Medical experts are of the opinion that this blood may not be as pure as the traditional vein sample, as the blood mixes with fluids from tissues and cells. This fact was completed ignored by Theranos.

Theranos developed a blood testing device called Edison. While undergoing tests to prove Edison’s accuracy to the Centers for Medicare and Medicaid Services (CMS,) Theranos fraudulently performed most of the tests using a traditional Siemens machine rather than its own device. Theranos also diluted the samples to match the specification of this machine, which resulted in inaccurate test reports. The underlying technology was at best in the development stage. Every start-up in the healthcare space needs to ensure that its business model and technology behind it are robust before full-scale deployment.

Customer loyalty – hard to get, harder to retain

Customers are typically much more invested in a healthcare purchase than, say, a retail purchase, mainly because of the grave ramifications. Hence, it is particularly important for healthcare providers to earn the customers’ trust. There have been instances of lab reports from Theranos being completely off the charts, or totally inconsistent with patients’ history/health. The company’s response to such reports was characterized by hubris rather than empathy – it did not take any step to rectify the errors. Ultimately, customers lost trust in the company.

Even its own employees felt something is amiss. When a Theranos employee wrote to senior management pointing to inaccuracy in test results, she was fired immediately. Instead of investigating and making things right, the company took an autocratic approach. A few employees blew the whistle, and reported wrong doings to regulatory authorities. This opened the proverbial can of worms for Theranos.

Governance, risk, and compliance – transparency is key

The belief in innovation was so ingrained that investors and partners remained oblivious to warning signs. The company made bold claims, but kept its technology secret. When Walgreens executives visited, they were not permitted into a lab to examine data. Yet the drugstore chain, in a rush to strike a deal, went ahead investing US$50 million with the plan to dispense Theranos blood tests at thousands of its locations. All the while, favorable media coverage failed to acknowledge the stark absence of scientific studies reaffirming the device’s credibility.

The Theranos tale is a revelation on multiple counts – a hype-fueled venture investment climate, fundamental loopholes in business/technology models, lack of transparency, adulatory technology reporting/spin – all of which are symptomatic of Silicon Valley today.

Today’s pace of disruptive innovation needs to be counterbalanced with robust fundamentals. The healthcare industry is in dire need of breakthrough innovation to tackle the three Cs – consumerization, cost, and compliance. Against this backdrop, Theranos should be treated as a reality check to rectify endemic inadequacies, but not to stifle innovation.