Overview of the healthcare industry
The healthcare industry is a service sector comprising medical providers, hospital networks, and health insurers delivering patient care and health management. It encompasses clinical treatments, diagnostic testing, administrative operations like billing, and home monitoring. Driven by rising expenditures and growing care demands, the sector is undergoing transformation through partnerships with major technology companies and the implementation of advanced analytics.
Industry Structure and Core Stakeholders
Healthcare organizations include doctors and nurses who provide clinical care, supported by information technology that lowers costs and enhances efficiency [1]. Physical delivery systems can comprise mixed public-private networks with over 1,000 public and 130 private hospitals [2]. Health insurers represent a major component of the sector, with large entities such as WellPoint operating multiple Blue Cross and Blue Shield units and utilizing analytics to assist healthcare providers [3]. In addition, healthcare and pharmaceuticals attract strong interest from private equity investors seeking market opportunities [4]. The sector also attracts major technology firms, including Alphabet, Amazon, Apple, and Microsoft, looking to tap into a lucrative market [5]. Within the market, providers interact with clients whose loyalty is connected to service quality, service value, and customer satisfaction [6].
Operational Workflows and Care Delivery Models
Hospital executives seek technological tools to execute routine administrative tasks, such as scheduling appointments, managing referrals, handling laboratory tests, and entering disease severity codes [7]. Assigning severity codes for billing purposes represents a standard rote task that organizations seek to automate to improve organizational efficiency [8]. In clinical workflows, systems are designed to ensure patients obtain key diagnostic tests prior to an initial visit and reach appropriate specialists [9]. Preventing wasted initial visits where patients are simply sent for tests enables doctors to see more patients [10]. For ongoing health management, operational systems can monitor patient medication orders and supervise individuals in home environments for signs of impending deterioration [11]. Sensor-based tools make hospital-at-home programs feasible when existing nursing staff supplies are insufficient to meet monitoring demands [12].
Market Economics and Systemic Challenges
The economic footprint of healthcare constitutes a substantial share of national output, reaching $16.1 billion and 7.5% of gross domestic product in Vietnam [13]. Projections indicated an increase to $22.7 billion, representing a compound annual growth rate of around 12.5% [14]. However, the industry faces severe cost inflation, rapidly growing consumer demand for accessible services, and organizations struggling to keep pace [15]. Delivery systems experience inadequate quality, insufficient space, and hospital overload [16]. Because domestic systems cannot satisfy demand, an estimated $1 billion is spent annually by over 40,000 patients traveling abroad for healthcare services [17]. Additionally, healthcare providers confront rising competition and evolving customer expectations when attempting to please clients and win their allegiance [18]. Customer loyalty in the sector is directly impacted by service value, client pleasure, and procedural, financial, and relational switching costs [19].
Technology Strategies and Digital Transformation
Health organizations increasingly turn to technology companies to lower health expenditures and transform care delivery [20]. Digital health initiatives offer significant potential to assist providers and insurers in delivering safer, more efficient, and cost-effective care [21]. Technology firms pursue distinct strategies across the sector: Alphabet focuses on data storage and analytics for population health leadership [22]. Amazon builds upon its medical supply distribution platform and develops Alexa as an in-home health concierge [23]. Apple converts consumer devices into patient health hubs, while Microsoft targets precision medicine using cloud storage and analytics [24]. The deployment of artificial intelligence offers major potential benefits across the healthcare industry by enhancing efficiency, safety, and access [25]. Insurers have adopted advanced cognitive platforms, such as WellPoint's deployment of IBM's Watson technology to aid in diagnosing patients [26]. Successful technological integration requires organizations to establish a data strategy and maintain dedicated staff for gathering, cleaning, and maintaining data [27]. Healthcare organizations must test AI models at their own sites prior to buying them and making them operational [28]. Hospitals must create organizational units that manage data strategy, the machine learning model life cycle, and end-to-end delivery into the care system [29]. Furthermore, hospitals will eventually need a plan for retraining and reskilling displaced workers [30].
Key facts
- The healthcare industry comprises clinical care providers, including doctors and nurses, health insurers, and mixed public-private hospital networks [2][21][1].
- Large health insurers like WellPoint operate Blue Cross and Blue Shield units and use analytics to help care providers work more efficiently [3].
- Administrative functions within the industry include scheduling appointments, managing referrals, handling laboratory tests, and assigning severity codes for billing [7][8].
- Pre-visit diagnostic testing and specialist referral systems help eliminate wasted visits and allow doctors to see more patients [9][10].
- Sensor-based remote care in homes helps supervise patient deterioration, oversee medication orders, and make hospital-at-home programs feasible [11][12].
- Skyrocketing costs and rapidly growing consumer demand outpace company capacity, while facilities suffer from insufficient space and hospital overload [15][16].
- Customer loyalty in the sector is directly determined by service value, client pleasure, and procedural, financial, and relational switching costs [6][19].
- Major technology companies enter the health market by focusing on population health, medical supply distribution, in-home concierges, health hubs, and precision medicine [5][22][23][24].
- Health insurers have adopted IBM's Watson cognitive technology to assist in diagnosing patients [26].
- Sustainable technology deployment in healthcare requires site-specific testing, dedicated data management units, and plans for retraining displaced workers [28][29][30].
Sources
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Video: The Digital Transformation of Health Care sloanreview.mit.edu
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Lori Beer, WellPoint’s executive vice president of specialty businesses and information technology, talks about how technology lowers costs and helps doctors and nurses be more efficient and effective.
- [3]
Beer explains how WellPoint, which operates a number of Blue Cross and Blue Shield units, is using analytics to devise ways to help health-care providers work more efficiently.
- [26]
The company is the first commercial adopter of IBM’s Watson technology, made famous by beating Jeopardy champions in head-to-head competition; WellPoint is among other things using Watson to help diagnose patients.
- [1]
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- [2]
Although the mixed public-private healthcare system has over 1000 public and 130 private hospitals, it still can’t meet the increasing demand
- [4]
According to a Grant Thornton analysis on the private equity in Vietnam, healthcare and pharmaceuticals finished third in terms of investor appeal, and 38% of those who were asked described them as being “very attractive”
- [6]
This work examines the connections between service quality (SQ), service value (SV), customer satisfaction (CS), and customer loyalty (CL) within the healthcare industry.
- [13]
According to Business Monitor International reports, the turnover for Vietnamese healthcare reached $16.1 billion, accounting for 7.5% of the GDP
- [14]
By 2021, this amount is projected to increase to $22.7 billion, which would indicate a compound annual growth rate of around 12.5% from 2017 to 2021
- [16]
For example, there is insufficient space and an overload in hospitals as well as inadequate quality healthcare.
- [17]
“It is currently estimated that, every year, $1 billion is spent by over 40,000 Vietnamese patients traveling abroad for healthcare services”
- [18]
Due to increased competition among healthcare providers, evolving customer expectations, and a plethora of options, it is increasingly challenging today to please clients and win their allegiance
- [19]
procedural, financial, and relational switching costs which have a determinant impact on customer loyalty (CL). Moreover, loyalty is also achieved through value given, and the pleasure of clients in the healthcare sector
- [2]
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How Alphabet, Amazon, Apple, And Microsoft Are Shaking Up Healthcare www.sciencealert.com
- [5]
For their part, the "Big Four" tech companies — Google-parent Alphabet, Amazon, Apple, and Microsoft — see an opportunity to tap into the lucrative health market.
- [15]
Costs are skyrocketing, consumer demand for more accessible care is growing rapidly, and healthcare companies are unable to keep up.
- [20]
Health organizations are increasingly turning to tech companies to facilitate this transformation in care delivery and lower health expenditures.
- [21]
The potential for tech-led digital health initiatives to help healthcare providers and insurers deliver safer, more efficient, and cost-effective care is significant.
- [22]
Alphabet is focused on leveraging its dominance in data storage and analytics to become the leader in population health.
- [23]
Amazon is leaning on its experience as a distribution platform for medical supplies, and developing its AI-assistant Alexa as an in-home health concierge.
- [24]
Apple is actively turning its consumer products into patient health hubs. Microsoft is focusing on cloud storage and analytics to tap into precision medicine.
- [5]
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Deploying AI in Healthcare: Separating the Hype from the Helpful | Stanford HAI hai.stanford.edu
- [7]
Hospital executives hope AI will one day perform healthcare administrative tasks such as scheduling appointments, entering disease severity codes, managing patients’ lab tests and referrals, and remotely monitoring and responding to the needs of entire cohorts of patients as they go about their daily lives.
- [8]
Some AIs will improve organizational efficiency by doing rote tasks such as assigning severity codes for billing.
- [9]
For example, AI systems could help ensure that patients are referred to the right specialist, and that they obtain key tests before an initial visit.
- [10]
“Too often patients’ first visits with specialists are wasted because they are told to go get five tests and return in two weeks,” Shah says. “An AI system could short-circuit that.” And by skipping these wasted visits, doctors can see more patients.
- [11]
AI could also be beneficial for health management, Shah says. For example, an AI system might watch over patients’ medication orders, or even supervise patients in their homes with an eye toward impending deterioration.
- [12]
So-called hospital-at-home programs might demand more nursing staff than there is supply, Shah says, “but if we can put five sensors in the home to provide early warning of an issue, such programs become feasible.”
- [25]
By improving efficiency, safety, and access, AI may be of enormous benefit to the healthcare industry, says Nigam Shah
- [27]
executives need to have a strategy and staff for gathering diverse data, properly labeling and cleaning that data, and maintaining the data on an ongoing basis, Shah says. “Without a data strategy, there’s no hope for successful AI deployment.”
- [28]
Healthcare organizations should test AI models at their own sites before buying them and making them operational, Shah says.
- [29]
realizing that potential is going to require creating organizational units that manage the data strategy, the machine learning model life cycle, and the end-to-end delivery of AI into the care system.
- [30]
And eventually, hospitals will need a plan for retraining and re-skilling displaced workers.
- [7]