Category: Healthcare & Life Sciences

Health Insurance Open Enrollment Period (OEP) 2021: Key Changes, Challenges, and Opportunities | Blog

“It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change.” – Charles Darwin

Charles Darwin’s famous words aptly describe what healthcare payers need to do in the times of COVID-19. The pandemic’s disruptive nature has forced the industry to accelerate adoption of many concepts –  such as telehealth – that had earlier been considered at least half a decade away from becoming mainstream. The changes that the US Centers for Medicare and Medicaid Services (CMS) has proposed for the health insurance Open Enrollment Period (OEP) 2021 are a clear indicator of these transformative times. The objective of these changes – such as the expansion of telehealth coverage, more transparency through regulations such as the Interoperability and Patient Access rule, and changes in risk adjustment / star ratings calculations – is accelerating the CMS toward its goals of universal coverage, transparency, member satisfaction, interoperability, and resilience.

As the OEP is a time when healthcare payers strategize about how to increase their enrollment numbers (in the short term) and achieve operational and business transformation (in the long term), it is imperative that payers not only understand the upcoming changes but embrace them through the right investments. OEP 2021 becomes effective November 2020, so healthcare payers are in the midst of the planning season.

In this blog, we take a look at the key changes CMS has proposed for OEP 2021 and analyze their impact on healthcare payers.

Exhibit 1: OEP 2021 proposed changes

Key changes suggested by CMS for OEP 2021

The impact of CMS-proposed changes on healthcare payers

CMS’ recommended changes for OEP 2021 are likely to impact healthcare payers in multiple ways:

  • Shift in membership and profit pools: The change in healthcare payers’ membership bases due to factors such as rising unemployment (which has reduced the employer-sponsored plan base) and the enrollment of End-stage Renal Disease (ESRD) patients in Medicare Advantage (MA) plans is likely to increase healthcare payer costs.
  • Member transparency and control measures: OEP 2021 has a slew of changes aimed at ensuring transparency through data sharing with members/patients via APIs and third-party apps. These changes include mandating the use of Real Time Benefit Tools (RTBT) for Part D plans and rules requiring plans to disclose the measures used to evaluate network pharmacy performance. It is clear that the CMS wants health plans (particularly MA Part D in this case) to invest in technology, data sharing, and reporting to enable the next phase of member-centricity in healthcare.
  • Medical Loss Ratio rebates support: Administrative Loss Ratio (ALR) / MLR has always been a pain point for healthcare payers, as an unfavorable ratio implies refunds and complex readjustments. With the CMS offering some rebates to payers in terms of how they calculate MLR, payers are likely to invest in improving care delivery initiatives.
  • CMS reporting dilemmas: With the CMS pushing healthcare payers to share actual member/patient experience data for Star Ratings and Risk Adjustment score calculations, healthcare payers will need to invest more in member satisfaction.
  • Shifts in health plan benefit inclusions: Telehealth services are only one set of inclusions that payers need to think about incorporating in plan benefits. Many other areas merit attention, such as member support, personalized communications, reorganization of provider network, and plan tiering.

How can payers navigate the changes and what are the likely sourcing implications?

While OEP 2021 is just another milestone for the CMS to drive healthcare efficiency, it is also notable that the changes are happening in the backdrop of the COVID-19 pandemic. The timing presents healthcare payers with both challenges and opportunities. In fact, industry experts believe that if ever there was a time for payers to change, it is now. This means that payers need to prepare strategies quickly to navigate the CMS-proposed changes, as well as changes arising from the COVID-19 disruption. The strategies will, in turn, lead to changes in their sourcing practices, thereby creating opportunities for outsourcing them to service providers.

Exhibit 2 lists the strategies that, we believe, healthcare payers will adopt in the coming months and the sourcing implications for each of them.

Exhibit 2: Payer mitigation efforts and sourcing implications

Payer mitigation efforts and sourcing implications

For the outsourcing and third-party vendor community, this is the right time to help mitigate the impact of OEP 2021 and the pandemic on healthcare payers. Service providers should align their offerings with payer needs.

If you’d like to know more about OEP 2021 and its wide-ranging impact, please read our recently published viewpoint Open Enrollment 2021 Primer: What to Expect and How to Navigate in the Wake of COVID-19. You can also reach out to me directly at [email protected] if you have any questions or observations.

The Teladoc-Livongo Merger: US$18.5 Billion Deal Heralds Virtual Care’s Breakout Moment | Blog

The Blockbuster Merger

The August 5, 2020, announcement of the US$18.5 billion mega-acquisition of Livongo – a chronic disease management company – by Teladoc – a multinational telemedicine and virtual healthcare company – rocked the virtual healthcare industry with seismic shockwaves.

Both companies had posted strong revenue growth before the acquisition. Teladoc’s revenue grew by 85% (or US$241 million) in Q2 2020. In the same quarter, its visits rose by more than 200% YoY to 2.8 million. Livongo’s revenue for the quarter grew by 125% YoY, bringing it to $91.9 million, with enrollments increasing 113% YoY to reach 410,000 members. The merger results in one of the world’s largest virtual health entities, with a combined valuation eclipsing US$37 billion.

The Mutual Strengthening

The importance of telehealth in a pandemic-stricken world became evident as the crisis overwhelmed providers (as it did other businesses), forcing many to close and postpone nearly all elective, low priority, and non-emergency appointments. To address ongoing health challenges, a significant portion of care provision shifted to virtual models, bringing companies like Teladoc to center stage. Digital healthcare and virtual health have since had an unprecedented surge in interest, investment, and adoption around the world.

The Teladoc-Livongo merger strengthens many facets of virtual healthcare delivery, which could benefit healthcare providers/facilities and patients. It is also evidence of the ever-growing complexity of engagements and constructs shaping virtual care.  The resulting organization will be able to realize multiple benefits given synergies between the two companies:

  • Teladoc will benefit from Livingo’s analytics prowess, which is delivered through its Applied Health Signals offering. The strong fundamentals of the data-driven approach underlying Livongo’s behavioral change and chronic management offerings can enable Teladoc to add significant value by layering its existing products with the acclaimed technology to provide its patients with tailored, efficient, and effective programs.
  • Livongo’s patient base will have access to a larger pool of healthcare professionals, who can provide more in-depth care and help diagnose and care for other ailments beyond the current set of offerings. The additional medical practitioners from multiple clinical specialty areas will enhance care delivery, improve options available to patients, enable access to a wider set of services, and eventually improve healthcare outcomes.
  • Patients will have access to a more integrated and comprehensive care experience given the expanse of virtual care segments the combined entity will offer.
  • Beyond the expanded pool of care professionals, both companies bring their own partnerships with health plans, employers, and other care-specific partners to the relationship, providing significant cost and coverage benefits to existing and future enrollees.
  • The combined entity will be able to increase its global footprint and benefit from cross selling services to an expanded client base, especially at a time when the adoption curve for virtual care is at the precipice of significant growth.

The Road Ahead

The era of digital health has been long coming, and the COVID-19 pandemic has only exacerbated the need for virtual care. This merger sets the stage for future growth, particularly in areas such as remote patient care, remote monitoring, remote diagnostics, digital-led triaging, digital therapeutics, self-care, and others that will revolutionize the care experience.

The industry has crossed an inflection point beyond which lies an extremely dynamic and unpredictable path, which requires healthcare entities to stay nimble, rethinking care models and care delivery through remote technologies. Healthcare payers and providers must quickly adapt to the shifting landscape and adopt the necessary digital means to stay competitive and become competent.

To find out more about the growing interest in and adoption of telehealth services, see our report Unpacking the Rise of Telehealth and reach out to [email protected] with your thoughts.

Data Monetization in Healthcare | Blog

A form of monetization, data monetization refers to the use of an organization’s data as an economic asset to reduce costs and increase business value. Organizations can monetize their data by providing third parties data access, commonly referred to as direct monetization, or by using the insights derived from this data to improve their internal processes, known as indirect monetization.

One industry that has seen an exponential rise in data in recent years due to increasing digitalization is healthcare. Health records are increasingly moving to the cloud, and the use of wearables and smartphones has become almost ubiquitous. This digitalization has paved the way for data monetization in healthcare, and it is helping not only to improve clinical services but also realize financial benefits. A strong integration of data with technology is set to revolutionize value-based care and personalized medicine and introduce better care outcomes.

Let’s take a closer look at how data monetization, particularly direct monetization, works in healthcare.

Bilateral data exchange – Among the earliest data monetization models, bilateral data exchange enables organizations to sell their data to one or more parties. It has experienced high adoption over the years, but its scope for disruption is limited, as single entities become data owners, and there is no data-based innovation at an industry level. Such data exchange is also mired in controversy, as highly sensitive patient data flows freely between organizations.

A case in point is the deal inked between Google and Ascension in November 2019 to provide Google access to millions of Americans’ health records. It came under the US Department of Health and Human Services’ regulatory scanner just 48 hours following its announcement.

Open platforms for data exchange – In this model, data providers can sell their data to platform owners, while enterprises can test their innovations using the platforms. The platform owners become data custodians in this case. This model has high potential for disruption, as it facilitates industry-wide collaboration for data transfer. It is gaining popularity among innovators, researchers, and academic institutions for early-phase testing of new products.

Mercy Technology Services’ (MTS) Real-world Evidence (RWE) network is one such open platform. MTS combines large data sets generated by health systems with advanced analytics, and provides insights for thousands of medical products that make it to the market every year. The RWE network allows medical product firms to test their products in real-time and providers to test their clinical decisions to offer better patient care.

Open marketplaces for patients to sell data – The most controversial aspect about data monetization is the sale of patient data without obtaining patients’ consent. Patients are the ultimate owners of their health data, and thus it is highly debatable whether large organizations should be allowed to make money by selling or buying this highly confidential data.

Open marketplaces for patients allow them to directly sell their health data to any party interested in buying it. Open Health, for example, has launched a platform that allows patients to monetize their health data by connecting companies or research institutions with people who fit the criteria for different studies or analytics. Users can share their health records with pharmaceutical companies, health systems, and insurers for a fee. This model is gaining popularity due to secure data exchange practices, and as it helps resolve the ownership and privacy concerns accompanying other models

Open marketplaces for data exchange – In such marketplaces, data providers can sell data, while interested entities can find and access relevant data. The seller retains the ownership, and buyers simply obtain the permission to subscribe to this data. This model serves as a bridge between organizations that possess a significant amount of healthcare data and those that need it. Amazon Web Services (AWS) Data Exchange is one such open marketplace that allows AWS customers to browse through and purchase a variety of data sets offered by data sellers

In our opinion, this model has the highest potential to disrupt the data monetization market in the coming decade, as it facilitates industry-wide collaboration for data asset exchange.

It is, thus, amply clear that in their quest for data, organizations can’t afford to ignore the need to ensure data privacy. The US Health Insurance Portability and Accountability Act (HIPAA) establishes national standards to protect individuals’ medical records and other personal health information. It applies to health plans, healthcare clearinghouses, and healthcare providers that conduct certain healthcare transactions electronically. The debate around data privacy is likely to get fiercer in the coming years, and only data monetization models that can address this challenge are likely to succeed.

What has been your experience with data monetization? If you’d like to discuss your experience or data monetization and how it applies in healthcare, please reach out to [email protected] or [email protected].

 

How the COVID-19 Pandemic is Impacting Pharma Sales Interactions with Healthcare Providers | Blog

With the world facing an unprecedented health crisis, one group shouldering the brunt of the challenge is our healthcare workers, who are battling the threat from the front lines. Under the circumstances, their interactions with pharma sales representatives have naturally taken a back seat, with many healthcare providers closing down access. This reality is accelerating pharma firms’ shift toward a virtual sales organization, and not only for the short term.

The amount of time, access, and influence hospitals have been willing to grant pharma sales reps has been dropping for quite some time now, and face-to-face engagements have declined significantly over the years. According to a survey from DRG’s 2019 annual ePharma Physician Report, 54 percent of physician respondents said they saw pharma reps in person in 2019, down from 67 percent in 2018.

DRG ePharma Physician Report 2019 – % of physician respondents on pharma rep interactions11 1

Source: ePharmaPhysician® US 2019

Today, given the COVID-19 pandemic, healthcare providers, including hospitals and clinics, are increasingly refusing in-person visits from pharma sales reps, and pharma companies such as Biogen and Global Blood Therapeutics have themselves suspended face-to-face meetings. In turn, virtual interactions between reps and healthcare providers are increasing, with BMS, GSK, Pfizer, and Sanofi – to name a few – scaling up the use of remote technology to ensure continued engagement with healthcare professionals. We expect this progress to continue even after the pandemic’s threat has abated.

However, not all pharma firms are well equipped for this shift; there’s a wide degree of variance when it comes to the maturity of their virtual healthcare provider engagement capabilities. Not surprisingly, the many digital solutions that exist in the current market can help them. Several software vendors and IT services providers have developed innovative CRM solutions, such as around personalized engagement, interactive detailing, and live video through intuitive mobile apps and web portals, in order to effectively engage healthcare providers virtually.

In response to the crisis, many vendors have recently begun to enhance product functionality. For instance, Veeva recently introduced new capabilities for remote drug sampling in Veeva CRM Engage Meeting. The company also announced several alliances for digital field engagement.

Yet, going forward, getting virtual sales right could be a major deciding factor for whether or not pharma firms are able to convert extensive R&D efforts and patent wins into commercially successful therapies.

Here are our suggestions on how pharma firms can successfully pivot to a virtual sales :

Picture1

  • Realign budgets Drive C-suite endorsement of initiatives whose goal is improving virtual engagement with healthcare practitioners. Money saved on aspects such as travel and organizing marketing conferences/gatherings should be diverted to investments in IT and content creation.
  • Engage technology partners to have the right solutions in place Assess the landscape of solutions from Independent Software Vendors (ISVs) and IT services providers. Look for verticalized CRM solutions meant particularly for healthcare provider engagement. Prioritize quickly implementable and scalable solutions that give the assurance of little downtime and offer omni-channel (email, web, mobile, etc.) and personalized engagement.
  • Create compelling content Rethink marketing strategies. Content delivered virtually needs to be all the more engaging, detailed, and easy to consume. Such content could include live videos, webinars, intuitive brochures, and web/mobile portals. Generating personalized content can improve conversion rates. Finally, content needs to be such that healthcare providers can consume it in their own time and follow up on as needed, minimizing the need for live interactions.
  • Train representatives to effectively engage and deliver information in virtual settings Facilitate a cultural shift in sales operations from being in-person to virtual through dedicated training programs. Representatives need to utilize the time saved on travel to draft strategies for more engaging interactions. They also need to be trained on using specific technology tools for provider engagement.

While healthcare workers are bound to be overburdened and under tremendous stress in these times, this is also a tough time for pharma sales representatives. Assertive sales behavior might come across as being insensitive, but at the same time, healthcare practitioners need to be kept aware of new therapies for ailments apart from COVID-19. Shifting to a virtual model represents a huge change. Engaging with empathy and showing flexibility in working around physician schedules will be paramount in the near term, as pharma enterprises come to grips with what could potentially be a new, or next, normal.

 

Is the Medical Device Industry Prepared for the New EU Medical Device and In Vitro Diagnostic Regulations? | Blog

The EU had planned to implement a new set of regulations – the European Union Medical Device Regulations (EU MDR) in May 2021 and In Vitro Diagnostic Regulations (IVDR) in May 2022 – to establish stringent device controls, improve transparency and product traceability, and strengthen clinical evaluation and post-market surveillance. But a series of overwhelming events has forced EU regulators to shift the MDR implementation from May 2020 to May 2021.

The global COVID-19 pandemic is the primary cause of this deferment. However, constant pushbacks from trade associations have also played a role, as has strong evidence of the industry’s under-preparedness to comply. For example:

  • Under the existing Medical Device Directive (MDD) there are 58 Notified Bodies (NBs) –organizations that have been designated by a member state to assess the conformity of certain products before being placed on the EU market – that cater to the industry. With the new regulations, there will be only 11 NBs with an EU MDR designation and three with an IVDR designation to handle a workload of 500,000 medical device technologies available in the European market
  • Reclassification and up-classification of both existing and new products under the new regulations put considerable financial and administrative strain on small and mid-sized firms
  • Increased complexity in documenting the additional requirements of clinical evaluation and post-marketing surveillance, as the industry moves toward a lifecycle approach, to necessitate proactive monitoring of device performance.

To overcome these challenges, stakeholders across the medical device industry, including medical device manufacturers, contract research organizations (CROs), and service providers, should focus on specific areas.

  • Medical device manufacturers should outline a compliance strategy to adapt to the regulatory reforms. As the regulations also increase the cost and time required to enter the European market, they should also build alternative business plans, with a focus on budgeting resources and redefining product portfolio and market entry strategies to remain competitive. To achieve compliance and build a collaborative and transparent framework, they should also update their legacy systems and embrace cloud-based solutions
  • CROs and service providers can provide strategic support to medical device manufacturers in building a regulatory roadmap and enhancing technological capabilities. Also, the new regulations’ stringent data requirements will increase the focus on data collection and management tools, and data governance and security. Service providers should align their clinical and post-market offerings with EU MDR and IVDR offerings to gain traction. For instance, HCL’s regulatory Center of Excellence (CoE) now provides end-to-end MDR and IVDR compliance services to manufacturers.

The medical device industry is exploring multiple ways to continue to stay relevant in the European market. While some organizations are leveraging the EU MDR and IVDR transitional provisions (MDD and IVDR certificates issued before May 2017, which will remain valid until they expire or May 2024, whichever comes earlier) to extend their market presence, others are building their regulatory capabilities and deploying both internal and external workforces to do so. Cook Medical, for instance, is hiring 20 full-time EU MDR-specific roles and working with over 70 contract-based individuals. Likewise, service providers such as Capgemini and TCS are seeking to hire regulatory specialists.

The launch date’s extension by a year might just provide the much-needed relief and time all stakeholders need to build their capabilities to comply with the new regulations.

For more insights on the impact of EU MDR and IVDR on the medical device industry, please see our recently published viewpoint Regulatory Overhaul of the EU Medical Device Market or contact [email protected], [email protected], or [email protected].

 

The 2020s Will be the Decade of Virtual Clinical Trials | Blog

Virtual clinical trials – wherein trial data is collected through sensors or remote monitoring devices carried by the patient – can deliver many benefits to pharmaceutical companies, including cost savings, better patient recruitment and retention, and improved data quality.

In 2011, Pfizer conducted the first-ever randomized clinical study that managed participants using mobile phones and the internet. Over the next few years, the virtual approach waned because of limited success stories and the considerable upfront capital investment required for sensors and platforms.

However, with recent technological advances, the proliferation of wearables (smartwatch shipments have doubled in the past several years), and the FDA’s urging clinical trial sponsors to keep their research ongoing via telemedicine in the wake of the COVID-19 situation, the clinical trial landscape is ripe for disruption by virtual trials.

Indeed, as a bellwether of growing viability, the first virtual trial conference was conducted in December 2019. During the two-day event, the key discussion points were understanding the decentralized model, regulatory challenges for virtual trials, and ensuring compliance for such trials.

Enter technology companies and Big Tech

To build momentum and drive synergies, pharma companies have started to partner with technology companies to test the virtual trials model. For example, in 2018, Novartis, Sanofi, and UCB individually partnered with Science37, a tech company focused on patient-centric models for clinical research, on patient-friendly clinical trials at home. Boehringer Ingelheim followed suit in 2019.

Numerous startups that address some aspect of virtual trial requirements have emerged. For example, VirTrial, a telehealth platform that allows pharmaceutical companies and Contract Research Organizations (CROs) to create patient-centric trials by replacing some in-person visits with virtual visits, was founded in 2018. Since then, it has ramped up its capabilities and expanded internationally across 31 countries. Also in 2018, IQVIA, a leading CRO, enhanced its portfolio by launching virtual research solutions aimed at patient-centric trial design and execution. And today, numerous companies, including Clinpal, Covance, Medidata, ObvioHealth, PRA Life Sciences, and Transparency Life Sciences, boast their own virtual trial platforms.

Not wanting to be left out of this highly lucrative market, the Big Tech players are also exploring additional opportunities. For example, Apple, Best Buy, and J&J recently collaborated to launch a virtual study to gauge whether the Apple Watch could help reduce a person’s risk of stroke. Apple has also been involved in this space through its ResearchKit, an opensource software tool for medical researchers, doctors, and scientists to collect data on people suffering from diseases. Similarly, Verily, a Google sister company, has teamed up with pharma majors to modernize clinical trials and improve patient engagement and recruitment, and aggregate data from wearable devices.

Technological advances

Of course, much of virtual clinical trials’ success lies in the strength, viability, and rigor of the technologies that support them. The picture below shows the technologic interventions that enable the virtualization of a clinical trial.

Technologies that enable the virtualization of clinical trials

And fortunately, the above technological interventions speed up patient recruitment, improve patient adherence and monitoring, and eliminate data siloes by having a single source of truth in the cloud – ultimately enabling a smooth and virtual experience during a trial.

The road ahead

Delivery model and technological advances and co-innovation among stakeholder organizations have set the stage for trials to transition from traditional to virtual. Technology players are more capable, risk-tolerant, and knowledgeable than before, leading to increased trust and synergies with pharma companies. While pharma companies are resorting to the motto of “fail fast, win cheap,” virtual trials hold great promise to revolutionize the trial landscape. And what better time than now, when the field is ready, and the fruit is ripe?

COVID-19 Highlights Life Sciences’ Need for an Adaptable Supply Chain | Blog

With cases topping one million globally, governments and health care agencies across the world are working to contain the spread of COVID-19 through several safety measures including the complete lockdown of high-risk countries. While this might prove effective in controlling the pandemic, enterprises across multiple industries are struggling to mitigate its growing impact on the supply chain.

Forced quarantine in manufacturing countries like China has significantly affected major industries including automotive, electronics, pharmaceuticals, and medical devices and supplies, highlighting the limitations in their existing supply chain models. The impact on the overarching life sciences industry is particularly acute, because it cuts across the entire ecosystem, and could potentially enable the spread of COVID-19 due to the diminishing supply of active pharmaceutical ingredients and medical supplies such as masks and hand sanitizers from the key supplier, China.

Despite acknowledging the risks of a single sourcing strategy, many organizations in the life sciences industry continue to work with a single supplier in low-cost regions like China and India to capitalize on their lower costs for labor and materials. This is risky in and of itself. And it also results in sub-contracting situations that lack transparency into the tier-2 and tier-3 suppliers, which further complicates risk management.

Here are our suggestions for how organizations in the life sciences industry can combat the global supply chain crisis:

  • Move beyond traditional and short-term remedial measures and devise a long-term proactive strategy with risk mitigation measures in place, at least for tier-1 and tier-2 suppliers. For tier-3 suppliers and beyond, at the minimum understand the potential risks involved
  • Establish a robust supplier monitoring system that maps sub-tier dependencies to ensure effective and efficient execution of risk mitigation strategies
  • Invest in infrastructure and technology that ensures transparency across the global supply chain, and next-generation supply chain management software that leverages technologies such as machine learning, artificial intelligence, and data analytics to gain real-time visibility into the supply chain
  • Develop predictive models that account for uncertainties and risk factors to realistically assess supply and demand and modify sourcing strategy as needed. These models can also help in running simulations to better define the associated impact, which in turn can serve as input for building comprehensive risk management programs

Despite the extra costs associated with building a proactive supply chain and qualifying multiple suppliers, doing so allows organizations to rapidly respond in pandemic-like situations, thereby reducing reliance on inventory management. Building an adaptable supply chain model that remains operational under any critical situation is the key to managing sourcing risk and avoiding global supply chain disruptions.

Please share your views on the impact of COVID-19 on the global supply chain with us at [email protected], [email protected], and [email protected].

 

Dassault Systèmes Acquires Medidata to Ride the Platform Wave in Life Sciences | Blog

When news first hit in late April 2019 of speculation around Medidata Solutions being acquired by Dassault Systèmes – a France-based software company that develops 3D design, 3D digital mock-up, and product lifecycle management software – Medidata’s stock value went soaring. The deal immediately made sense. The fact that Dassault Systèmes was looking to ramp up its offerings for life sciences companies made Medidata, which we recently recognized as a Leader and Star Performer in our PEAK Matrix™ for Clinical Trials Products 2019, an attractive acquisition prospect.

 

Everest Group Life Sciences Clinical Trials Products PEAK Matrix Assessment 2019

 

Fast forward to June 2019 and the deal is done. The all-cash transaction is valued at US$5.8 billion and represents Dassault Systèmes’ largest acquisition to date. It will finance the deal with a €1 billion loan, a €3 billion bridge-to-loan facility, and available cash. It’s the first time the French company has resorted to external funding, which only accentuates how much it prizes Medidata as an asset.

The strategic intent behind the deal

Dassault Systèmes began focusing on the life sciences market a few years ago with the vision to improve the penetration of digital technologies in the industry. Its last life sciences-focused acquisition was that of Accelrys in 2014, which helped Dassault Systèmes establish BIOVIA, its brand for biological, chemical, and materials modeling and simulation, research, and open collaborative discovery.

With the acquisition of Medidata Solutions, Dassault Systèmes makes a statement that it is serious about achieving this vision. The acquisition will make life sciences Dassault Systèmes’ second largest industry focus, after transportation and mobility. Medidata grew at a CAGR of 17 percent during 2015-2018, driven by its dominance in electronic data capture through its flagship product, Rave.

Dassault Systèmes prides itself on its 3DEXPERIENCE platform, which is meant to enhance digital collaboration in complex sectors like aerospace, infrastructure, and mobility. Dassault Systèmes now looks to extend these benefits to life sciences. By adding Medidata’s clinical and commercial offerings to its own 3D experience expertise, Dassault Systèmes aims to create a platform that offers complete digital continuity to the life sciences industry, addressing complex challenges such as personalized medicine and patient-centric experiences.

Unpacking the companies’ synergies

Synergy area

Dassault Systèmes

Medidata Solutions

Value proposition

 

Design, modeling, and visualization software, with leading capabilities for the aerospace, defense, and consumer goods industries. Dassault Systèmes now aims to bolster its life sciences division

 

Life sciences clinical and commercial software pure-play, with deep domain expertise and strong consulting pedigree

Coverage of the life sciences value chain

 

Drug discovery, manufacturing, and supply chain Clinical and commercial operations

Key technology offerings

Design, modeling, simulation, and virtualization software Data capture, real world evidence, advanced analytics, AI-driven insights, and operations management

Customers

Customers are mostly in the aerospace, defense, and consumer goods industries

Sizable number of European life sciences clients, including medical devices firms such as Medtronic, FEops, Novo Nordisk, and Kavo Dental

1,300 life sciences companies, three quarters of which are in America. This includes most of the Big Pharma and CRO firms

Product coverage across the value chain

Product coverage across the value chain

Key opportunities

Dassault Systèmes is sitting on a lot of cash. This will give Medidata the financial muscle it needs to make the right investments in talent and technology to compete with the big players like Oracle Health Sciences and Accenture.

The integration of capabilities could lead to the creation of a unique end-to-end platform for life sciences across the entire value chain. Medidata has clinical and commercial capabilities, and Dassault Systèmes has offerings for drug discovery, manufacturing, and supply chain.

Potential risks

It’s not clear how the integration of Medidata’s products with the broader 3DEXPERIENCE platform will take place. It could be a challenge linking Medidata’s clinical trials and commercial operations solutions with Dassault Systèmes’ design and visualization offerings.

Dassault Systèmes’ has diversified offerings across several industries. In the long run, this may dilute Medidata’s brand image as a leader and focused player for clinical trials technology.

Closing thoughts

The life sciences industry needs aggressive digitalization to realize efficiency gains and reduce the lengthy timelines between drug conceptualization and drugs reaching the market. We’ve seen technology vendors coming up with integrated solutions for clinical trials to help enhance trial efficiency. While the need for a platform is evident, technical debt and change management issues hinder this platform-centric vision. This is a high growth market, which is likely to attract more interest in the coming 18-24 months. More SaaS companies will need to pivot to the platform conversation to scale and remain relevant. We will be tracking this space closely.

The Rise of BigTech in Healthcare | Blog

A couple of weeks ago, my colleague and partner-in-crime, Abhishek Singh recapped his experience at HIMSS 2019, healthcare IT’s annual jamboree.

Now, I want to expand on one of them – how BigTech firms are homing in on healthcare (got to love almost-alliteration). Here are my key observations on how different BigTech firms are approaching the business of healthcare, based on what I saw and heard at HIMSS.

Google

The focus for the Mountain View-based company has been to develop a secure and compliant cloud platform, which has tools unique to the healthcare industry. It claims that the Google Cloud Healthcare API has significant momentum in the industry to really bring silos of data together. It has enabled FHIR integration as well. The general release of the platform is still sometime away though. On a lighter note, while Google is using AI to solve complex and messy problems in a range of industries, its HIMSS booth had a demo to help address the much dreaded fax plague in healthcare, allowing users to fax medical information to Google Drive, the company’s cloud storage service (as someone on Twitter pointed out), following Eric Schmidt’s observation that healthcare is still in the “stone age.”

Microsoft

The company, reinvigorated under Nadella’s leadership, is taking a smart approach to healthcare across two levers:

  • Utilizing broader technology bets with healthcare-specific use cases. It launched a service to help healthcare firms move large sets of patient data to its cloud (Azure) and connect with other systems. This is one of several attempts to connect patient health records in the cloud. It announced the availability of its healthcare chatbot in the Azure marketplace, as well as the launch of an API for FHIR in Azure
  • Leveraging a partner ecosystem. Microsoft is taking an ecosystem-based approach to accelerate healthcare adoption, using partners such as CitiusTech, DXC Technology, and Philips, to develop more cases on its technology offerings.

Oracle Health Sciences

Oracle is taking a dual approach – doubling down on a focused play in healthcare data and analytics, as well connecting with its life sciences focus – as the ecosystem converges. It announced integration between Quorum’s institutional review board (IRB) and goBalto, its recent acquisition focused on clinical trial site selection and activation. And it introduced Connected Care, a telehealth and remote patient monitoring tool initially aimed at improving stroke outcomes. Its other big focus was on Oracle ERP Cloud as the single stop solution to help unify a health system’s enterprise systems (HR, financial, supply chain) on an integrated platform.

Salesforce

Salesforce has bet big on verticalizing its CRM strengths to help deliver personalized patient experiences (CRM as the gateway to digital transformation.) It already has a bunch of use cases across the care lifecycle. Its focus is now on leveraging a partner network and adding more healthcare-centric functionality to its core set of products. For instance, it launched a feature to add social determinants of health information to patient profiles to improve outcomes. It also announced Fairview Health Services as a client deploying Health Cloud, Marketing Cloud, Heroku, and MuleSoft to centralize and manage patient touchpoints. Building from its progress at HIMSS18, where it collaborated with Cerner, Salesforce also announced new healthcare solutions using Health Cloud, built by consulting partners such as Accenture, Deloitte Consulting LLP’s Deloitte Digital, Huron, IQVIA, Silverline, Simplus and Torrent Consulting.

Uber and Lyft

Both ride sharing companies had a presence on the exhibition floor, and Lyft made a major splash and co-sponsored the opening reception as well. The common use cases they’re both addressing are around social determinants of health. An example is Lyft’s partnership with Allscripts (Lyft Concierge) to help patients get to appointments and lead healthier lives.

Ever since Amazon formally announced its move to shake things up in healthcare, the industry has been abuzz with an equal mix of anticipation and trepidation. While many are fixated on the idea that Amazon will take a Customer Experience (CX) route to healthcare, similar to its ecommerce disruption, I think this belief is misplaced. Why?

As we noted in our earlier analysis, Amazon is best placed to solve more messy problems in healthcare. Not many people realize how Amazon is already playing a role in reshaping healthcare’s supply issues. For instance, more than half of the products available on the Amazon Business platform are medical commodities such as syringes, IV bags, forceps, etc. It is targeting healthcare organization’s tail spend (typically 20 percent), which is focused on purchasing, pricing, suppliers, etc. This plays into its deep strengths in warehousing, distribution, and logistics.

At the end of the day, Amazon is just one of the growing number of technology companies looking to tap into the $3.4 trillion U.S. healthcare market. If HIMSS19 was any indication, BigTech is only going to accelerate its focus on solving key issues, with an ecosystem-driven approach. My bet for HIMSS20 is for someone showcasing curated Netflix content for improving mental health. One can always dream!

Three Digital Healthcare Takeaways from HIMSS 2019 | Blog

I experienced three pleasant surprises at last week’s Healthcare Information and Management System Society (HIMSS) conference. They were all about a perfect storm that is building to correct all that has been wrong in the digital healthcare space all these years.

Healthcare Companies are Exploring Cures for Their #DigitalHeadache

Payers and providers alike are growing increasingly disillusioned with the outcomes of their digital programs. In fact, 78 percent of the healthcare leaders we surveyed in late 2018 indicated some sort of failure with their digital initiatives, whether big or small. The good news here is that most forward-thinking leaders are going back to the drawing board to redefine their digital strategy. Anthem, Intermountain Healthcare, and New York Presbyterian are great examples of organizations that have taken up the cudgels to fix digital healthcare where it fails – organization and culture.

There’s Increased Focus on “Enabling” the Patient Experience

To make the “patient experience” successful, enterprise leaders are taking a step back and focusing their attention on creating experiences for their workforce, clinicians, and partners (e.g., physician group, CMS, government agencies.) Don’t get me wrong, patients still need to be at the center of our universe. However, the personas that enable and deliver experience for patients need a fix first.

Innovation is Coming from Unexpected Sources

It was heartening to see the likes of Amazon, Google, Microsoft, and Salesforce steal the march from the big boys in the healthcare tech space – i.e., Cerner and EPIC – in asserting themselves as the technology visionaries in healthcare. Their focus on healthcare microservices is a relief for healthcare executives trying to navigate the “all or nothing” approach of the EMRs.

There is one player that seems keen on reinventing itself: Optum. Through a nimble product and services strategy, Optum is touching upon on all the hot buttons – MLR, analytics, PBM, and claims. Optum is the specialist vendor to watch out for when it comes to healthcare.

Last, but not least, what really took the cake were the innovative and exciting POCs related to clinical AI and visualization that Israel and Ireland – yes, the countries – showcased in their booths. These were some of the most fully baked solutions that I have seen in my 10 years attending HIMSS.

Hence, it’s with good reason that I left fairly impressed with the developing ecosystem knocking on the doors of healthcare organizations that are hungry for outcomes.

I will sign off by sharing an illustration from our recent study that analyzed the investments 27 of the leading healthcare payers and providers have made in artificial intelligence (AI), a key marker in the world of digital healthcare. This study objectively analyzed these investments from the perspective of ROI achieved.

Assessing 27 healthcare players (payers and providers) on their Artificial Intelligence investments

As you can see, there is a wide variance even within such a small sample set of healthcare organizations. FOMO (Fear Of Missing Out) pushed a lot of organizations to invest in the flashy new toy called AI. However, not all of them embarked on their investment journey by first enabling the core components of capability.

The difference between the best and the rest in healthcare is simply this: the ones to get the best ROI – those on the top right – are taking their journey through step functions that enable not only technology but also an organizational culture of innovation.

Please contact me at [email protected] if you’d like to hear more about my take-aways from the HIMMS conference or our study, named “Dr. Robot Will See You Now: Unpacking the State of Artificial Intelligence in Healthcare – 2019.”

 

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