Digital health ecosystems: A payer perspective

McKinsey on Healthcare
Original McKinsey article

Creating or participating in a digital health ecosystem can allow payers to take advantage of their central position in the healthcare landscape and expand in new directions.

July 2019 | Mathis Friesdorf, Ulrike Deetjen, Ajit Sawant, Greg Gilbert, Florian Niedermann

Change has long been a constant in the healthcare sector, but it has greatly accelerated in recent years. Consumer expectations are growing, driven by developments in other industries. Prices continue to rise, and more advanced medical services become available on a regular basis. New data-driven technologies are spurring digitization and automation across the board.

Combined, these dynamics are causing true disruption, leading to a healthcare market that requires fundamentally new capabilities to effectively compete (Exhibit 1). Some payers, for example, are integrating with other parts of the value chain to improve member experience in new ways, which is altering market dynamics. Technology start-ups are offering new products and services designed to address traditional industry challenges, thereby disaggregating the value chain and often diluting payers’ value propositions in the process. Technology titans are threatening to attack large value pools, leaving some payers in danger of being disintermediated or carved out of high-value areas. Given the rapidity of technological advances, future innovations could leave many conventional payers behind.
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