Telehealth and customer-centric services
A quick exploration of a new health landscape with industry experts. Culminating two weeks of emphasis on the health sector, we welcomed numerous innovators from the health sector to discuss health innovation in a ‘TogetherApart economy’. During this TogetherApart Session: Health, we presented 4 global shifts in consumer behaviour that are affecting the health industry world wide, and discussed thoughts and opinions from these innovators’ perspective and experience.
From digital-last to digital-only industry
If one thing’s for certain, the pandemic has shaken up the health sector like we have never seen before. Globally, healthcare organisations and departments have been pulling out all stops to find new digital ways to adapt to a changing situation. Whereas other industries have been fully adapting to new digital ways to reach the customer for many years, the health sector stayed behind. Rather than a shift from digital-first to digital only, one could call it a shift from digital-last to digital only. For a long time, digital applications in healthcare have been regarded as not needed. One of the digital solutions that has lately become a booming focus point for organisations is telehealth, but telehealth is not the only thing making up the digital part of health innovation. It’s about a more remote way of serving patients and doctors, and telehealth is one of the more concrete aspects of going digital.
Entirely new services built around the customer
So what is actually going on: are we seeing digitization leading to new services, or are we seeing existing services going digital? Generally speaking, digitizing current processes and services is not what is happening. It is taking this new situation and building new services based on that. An example is banking. This is a sector where digital applications were forced on employees and customers because of cost savings. Now you see that it has become a way of making better services, like N26 in Germany, so really using the digital medium and technology to offer way better services rather than digitizing old services.
New initiatives and knowing your customer
With many health organizations now pushing innovation, a lot of new initiatives have been introduced during the pandemic. One of the solutions we discussed comes from Bram Smeets (Meandergroep Zuid Limburg): “It’s a single-point solution combined in a system, on-demand and usable according to the situation of the patient. It helps people work on lifestyle goals and social effects. And because it’s digital it works great in these times of COVID-19. But despite great results, the winnings are not for the health care providers but for the WMO (Social Support Act). So the initiative greatly improves health and reduces costs, but nobody wants to pay for it.” It’s only one of the innovations they did in design thinking, but they just don’t get the funding. Bram: “It’s a matter of challenging the system and the structure of the system.”
A scattered ecosystem makes innovation hard
So how do you succeed in a difficult system? It’s a matter of starting a network of innovation, also on government level. The next step is to involve the winnings to the government. Thom Frielink (Health Holland) explains the difficulty of these sorts of challenges: “A lot of startups have huge winnings, but are so scattered across all different kinds of stakeholders that it’s hard to find the paying customer. Many innovations really benefit the patient, but patients are unwilling to pay for the service. Many startups fail to find the right customer. In Holland, I see this a lot and the tricky thing is that people say you have to make systemic innovation, but you often see that stakeholders are in a very political system that has a certain political balance, so there won’t be changes that easily. The trick as a startup is to manoeuvre in the current system. I think that often determines the difference between more and less successful startups.”
Thinking in small niches to start new opportunities
But because in the Netherlands everything is structured and effectively managed, it’s very hard to find a paying customer. Firms are being forced to think way beyond mass ideas and go into smaller niches with more independence of the systems out there. The fact that it is a system blocks innovation a lot. Jeroen Wierenga (BeMotus): One of the mistakes is that you only focus on the patient and realizing better healthcare, but ignore the interests of the other parties, e.g. insurance companies. Trying to innovate this way will be hard. In most cases the patient is not the paying customer and besides better healthcare, healthcare must also be affordable in the long run. So in addition to better healthcare, it must also be more efficient.” In the end, it's knowing your customer. If you think offering a better service and you've triggered your customer, but if they're looking for a lower price, then that’s their need instead of the need you thought it was. So it’s in a way about only thinking outside in instead of inside out, and really knowing who your customer is in that sense.
A new normal, or a temporary disruption?
We are currently living in a changed world of new hygiene habits and possibly another financial crisis. Increased awareness and anxiety are affecting mental health, but also influence people to take up new hobbies. Remote sessions were more an exception than a default, but now people are embracing it. Are these new habits and ways the new normal here to stay or not? We proposed this question to our health innovators and the opinions were quite evenly distributed, close to 50/50. Henk Hutink (Nictiz) has a gut feeling that it’s only temporary: “I think that people will be coming back to the old ways, old habits and traditions.” Thom Frielink (Health Holland) agrees, but adds that it all depends on whether or not we’ll face a second wave, because if changes need to be enforced for a longer time we’ll see what changes will actually stick. “What I see now, is mostly discomfort with the current situation for healthcare professionals. They really want to go back to having actual contact with their patients. For telehealth, I think doctors rather go back to the old ways.”
Patients will be driving the new normal
So what about patients? Would they want to go back? Having recent personal experience with both physical and digital healthcare in the near past, our interlocutors tend to prefer both sides. But besides personal preference of patients, it will mostly depend on the health condition and the way things will be organised in the future. As doctors are being paid to see patients, organisational change is needed to create incentives to keep patients at home might, as Bas van de Sande (Roche Diabetes) explains. “Diabetes patients have to go to the hospital 4 times a year, even if they are feeling well. If you ask them, they rather stay at home. But then you have to organise and finance it differently.”
Looking for new ways to start a movement
Organising and financing differently, leads to the question who has the real power. Supposedly patients have been asking for change for years, but somehow they can’t seem to accumulate power to actually make it happen, according to Bram (Meandergroep Zuid Limburg), who is quite sceptical: “I don’t see it happening very fast, although I hear these thoughts everywhere. The doctor still wants to see his patients in his room, not having to do all kinds of digital stuff and just see a wound from different angles.” Provoking mass change is however a hard thing to start with and these kind of system changes are often born in smaller markets, perhaps as a luxury service paid for by the wealthier class and basically circumventing the system, eventually provoking a change in the Netherlands, as Joost (ktc) puts it: “Innovation is also looking for the right opportunity and looking for way smaller environments to start something in and afterwards scale to a bigger environment, instead of going for a big change that’s very hard to provoke because you need include everyone and every stakeholder.”
Hybrid services and business models
One of the 4 global trends affecting the health sector from our report is the rise of hybrid services and business models. Although not entirely new, this trend is relevant now more than ever. We see for example Alto Pharmacy, who is focusing on friction free service for prescriptions. The lines of what were previously very vertically defined services are blurring and becoming a new ecosystem where you get home delivery, specialty care, price negotiation. A place where the pharmacy is your partner, rather than just an institute where you get your medicine, so basically blurring lines between doctors, pharmacy and specialty care. It’s only one of many examples where hybrid models not only have very customer centric services, but also have subscription models where you have recurring income aligned with recurring value.
Taking into account every type of patient
From a perspective of general practitioner care i.e. first line care, Jeroen Wierenga (BeMotus) elaborates on why of all four trends this one is mostly driving change: “The difficulty lies in the diversity of patients and customers. From old people that want the ‘old’ care face to face, to millennials that have a different look on services and really want 24 hour service from their phone and want questions answered immediately. The new services have to be in place and have to be digital, but the old way of doing business cannot be cancelled yet. It will take a long time, and slowly people will evade who want the old services.”
We see that a changing customer is one of the main driving issues here, and perhaps it also addresses why exactly hybrid services are becoming so important. Throughout the generations there are major visible differences in the way these generations look at the way healthcare services should be. Bram: “My granddad who is 85 has a vision about what a nursing home should do: namely taking care for. My parent’s really don’t see it like that. They see an Amazon making sure they have everything delivered at home. One step further, younger people see it even more differently.”
The way forward
As we learned in these brief conversations, driving changes in the organisation is hard, but much needed in order for digital healthcare innovations to succeed in the long term, both on organisational and financial level. Starting with smaller niches, gradually circumventing the system and becoming the default for the masses is a successful strategy, while startups must also be capable of manoeuvring their way through the system, also towards a governmental level. Time will tell wether the healthcare innovations we see will succeed post-corona, but it will hugely depend on the way things are organised for these innovative solutions to work. Know that whether you’re a pharmacy, healthcare provider or insurer, in the end it all starts with knowing your customer. What and who’s problems are you solving and who are you offering value for? That is, and will always be, the key to innovation.
Are you ready to discus if and how hybrid services and new business models can help accelerate your own innovation? We would love to start the conversation. Drop us a line on jeroen@ktcagency.com and don’t forget to check out our free tools for strategic design canvases and tools to get you going. Lastly, visit our dedicated Healthcare page for more details on our work in the health sector. Starting Monday, June 22, we enter two weeks of emphasis on personal finance and insurance, so if that’s within your interests, definitely follow our LinkedIn page.
Special thanks to our participants: Isha Govaarts, Bram Smeets, Eric De Jeu, Oskar Kemperman, Thom Frielink, Jeroen Wierenga, Bas van de Sande, Henk Hutink & Oscar Amador.
