Building the Strong Healthcare Brands of Tomorrow

Healthcare has been on a bull run.

For decades, Americans have been shelling out an ever-increasing amount for their health. In 1960, Americans spent 5% of the GDP on healthcare. In 2020, national health expenditures grew 9.7%, to $4.1 trillion, or $12,530 per person, and accounted for 19.7% of gross domestic product (CMS). If this trend continues, healthcare spending will make up 26% of GDP—$12 trillion—by 2040 (Deloitte). A quarter of total U.S. revenue, spent on healthcare.

But most likely, it won’t.

Besides the obvious unsustainability of this momentum, a number of disruptive factors are taking aim at the healthcare space. Improvements in efficiencies strive to reduce waste and to introduce pricing transparency and cost-cap regulations to reduce bloat (including the 2022 Inflation Reduction Act). New competition from retailers threatens current monopolies—though, perhaps, by creating their own. And the general progress of medicine toward better outcomes seeks to reduce chronic and emergency needs in favor of preventative care.

The impact of all these compounding factors is reduced prices. Which is life-changing news for consumers. But for businesses and their employees, it also means reduced revenues.

A Deloitte study found that by 2040, health spending will hold about steady at 18.4% of the GDP, which, at $8.3 trillion, is a revenue gap to the tune of $3.7 trillion. And within this spending, the breakdown looks very different from today’s healthcare system: a 35% reduction in inpatient revenue and a 44% reduction in demand for hospital beds by 2030.

Instead, money will shift elsewhere—from 80% of health spending directed toward care and treatment to 60% of health spending directed toward improving well-being by 2040 (Deloitte). That means that instead of focusing on emergency procedures and treating diseases, care will instead shift to a holistic and preventative model, which could encompass factors far beyond physical or mental ailments like financial health or community support. This is a significant shift from the status quo and represents a tidal wave of change for healthcare products.

With money drying up in care and treatment, businesses are looking at new models—and revenue streams—in the health and whole-person wellness space to remain competitive.

And in the rapidly unfolding future, they’ll have company. The consistent expansion of retail health competitors like Amazon and Walmart will slice into the market with competitive pricing and serve as an alternative to more traditional healthcare establishments. Gartner predicts that “by 2025, 10 major employers will disintermediate payers’ provider networks by contracting directly with a major retailer to deliver low-acuity care, chronic disease management and ancillary health and wellness services to employees.”

We’ve identified the current trends and trend drivers that will change why and how companies show up in the marketplace. This includes promising investments for the healthcare brands of tomorrow, including those that specialize in wearables, hospitals at home, telehealth, AI and data sharing, and their reason for being: consumer empowerment and ecosystem models.

We then considered what obstacles will arise from these developments, and how companies can maintain their edge and get ahead of the challenges of tomorrow in order to establish themselves as emergent leaders. We ascertained that building trust to drive choice will play a considerable role in market differentiation amid these hurdles.

After all, technology is the great equalizer, not the differentiator.

The healthcare system has been disappointing to U.S. patients and medical professionals alike for a very long time. America spends an exorbitant amount on healthcare compared with other developed countries, yet our life expectancy falls short of those with smaller spends (Our World in Data). Our health is more expensive, and yet poorer, than the rest of the developed world.

In just the past few years, the satisfaction score for U.S. hospitals slid from 76 in 2018 to 69 in 2021. This puts the satisfaction score for hospitals lower than that for audiences surveyed about their satisfaction with the IRS, which came in at 71.

Introducing the new, empowered healthcare consumer. Disappointed in the systems that deliver care, patients have sought more autonomy and control of their healthcare and health decisions.

The healthcare consumers of tomorrow are already equipped with growing information about their health. A Deloitte study showed that 76% of U.S. consumers have gone online to learn about health and care, 64% searched for provider reviews online and almost 50% tracked health metrics like blood sugar levels.

But beyond research and information, healthcare consumers are actively seeking out alternative or complementary treatments—measured by the ballooning wellness industry, which is predicted to reach nearly $7 trillion by 2025 at a 9.9% average annual growth rate (Global Wellness Institute). This is a huge opportunity for the healthcare industry to meet consumers’ needs by providing them with a holistic, well-rounded wellness experience.

Cutting-edge technologies are incredibly important. Yet the brightest future of healthcare lies not in its tools, but in better deployment of those tools.

In the past, industry titans relied on one of two strategies for growth: horizontal integration (acquiring or merging with companies that conduct business within the same plane of a product’s supply chain) or vertical integration (acquiring or merging with companies that conduct business throughout a product’s supply chain).

Tech companies upended industry as we know it by establishing a third strategy: functional integration, which places customers in the center of an ecosystem and uses their business to position products and services around the user.

But the control over limitless product types was only part of the model’s success—the real gold was in data. Companies had access to insights on consumer behavior and preferences like never before, and that data was then leveraged to provide hyper-relevant products, services and communication. This model creates a continuous value exchange, retaining the customer and creating a better consumer experience.

As the healthcare industry faces rapidly changing consumer demands—access to telehealth, hospital-at-home services, greater efficiencies at the digital front door—healthcare companies may be tempted to merge and acquire their way into capabilities better suited to this new landscape. But to really play and succeed, they will likely find more success in functional integration models.

That’s because M&A activity takes significant investment, in both resources and time, and creates behemoth organizations that sometimes struggle to pivot in the face of challengers. Functional integration, on the other hand, takes the onus off the healthcare company to provide end-to-end services within its wall (and all the talent, equipment and real estate that requires), and instead allows it to become the switchboard seamlessly connecting its customers with the right provider or products at the right time.

It can also speak to the empowered consumer. As mentioned above, healthcare consumers are seeking wellness-oriented care that can complement their medical treatments. A platform approach can lock customers into an ecosystem that provides everything from pharmaceuticals to meditation apps. Brands that adopt an ecosystem model support the network effect by unifying numerous products and services under a single idea so customers view interactions with companies as one holistic, beneficial and problem-solving experience, instead of the disjointed care we have today.

Retailers and tech companies are already starting, encroaching on a space that was once held solely by healthcare companies. Amazon, Walmart and even TikTok owner ByteDance are all making big moves into the healthcare space, with more joining every day. As we write this, CVS is making huge waves with its $8 billion acquisition of Signify Health. And retailers will have an advantage because of their existing ability to deliver a wide range of products to patients, both digitally and physically.

If empowerment and ecosystems are the societal and industry trends that make change attractive, then technologies are the trend drivers that make change possible. Here we examine these trend drivers and the characteristics their providers will compete on.

For the empowered healthcare consumer, access to their own data is incredibly important. And they will increasingly get their data not from providers or hospitals, but from the technology on their persons and in their homes.

Research and Markets predicts that “the global internet of things (IoT) in healthcare market size is expected to reach USD 534.3 billion by 2025, expanding at a CAGR of 20.2% over the forecast period.”

What was once only available in-hospital can now be worn on the wrist. And this access is quickly changing how we receive information about our health. Deloitte found that Americans visit their physician about four times a year, and they experience 0.5 health-related micro-interactions every day—think your Apple Watch alerting you to a fast heart rate. But by 2040, it projects that “the typical American will have 77 daily health-related micro-interactions, while spending less time interacting with their doctor.”

The possibilities for these “wearables” and smart devices are endless: smart toothbrushes that detect genetic changes indicating disease, clothing that measures temperature and dehydration, jewelry that clocks sleep patterns, toilets that test urine for infections or pregnancy, cars that detect increased heart rate and intervene with soothers or warnings before road rage takes over.

And the data they will provide, both to the consumer as well as to healthcare professionals and companies, will be critical toward building both better personal and community health. It will also come with significant trust issues, but more on that later.

Technology enables healthcare to happen anywhere. And in particular, in the home.

The model of hospital at home has a significant benefit to the patient, including control over the environment, lower costs and reduced risk of nosocomial infections. These benefits are already causing movement, with Gartner predicting that “by 2025, 40% of healthcare providers will shift 20% of hospital beds to the patient’s home through digitally enabled hospital-at-home services, improving patient experience and outcomes and reducing the cost of care,” and Grand View Research predicting that the home healthcare market will be worth $634.9 billion by 2030.

Consumers are also embracing virtual care. McKinsey reports that telehealth has stabilized at 38 times its pre-pandemic levels, and that the number of virtual-first health plans grew from only one in 2019 to at least eight in 2020. The lower cost and convenience doesn’t take away from consumer satisfaction—Accenture reports that “virtual experiences create very nearly as much positive emotion as in-person consultations, and patients would use digital technology for a number of important interactions with healthcare organizations.”

The future where healthcare can be delivered remotely is almost here, and AI adoption plays a critical role in delivering these personalized, decentralized experiences. But we would say AI’s main target is inefficiency for both providers and patients alike.

And it’s an industry that could use more efficiency—according to an academic paper from Humana Inc., about 25% of healthcare spending can be categorized as waste (JAMA).

For providers, AI can streamline everything from diagnostics and the coordination of care to scheduling and staff rotations. And for patients, it enables a personalized, seamless experience throughout care and treatment. Which is important—an Accenture study attributes the most frequent source of bad experiences to inefficient visits to medical providers. Deloitte predicts that by 2023, 20% of all patient interactions will involve some form of AI in either clinical or nonclinical applications, up from 4% in 2020.

The breakthrough technology around accessibility and efficiency will provide more people with the healthcare they desperately need, with lower costs for operators because of the decreased need for real estate. With savings in both operating costs and efficiencies, and better offerings to consumers, these advancements will have a significant impact on how people access care.

Healthcare companies that are ready to embrace these new technologies speak to the empowered customer and dive into a functional integration model face numerous infrastructural challenges. But many of them boil down to the pursuit of the gold standard of brand and consumer relations: trust.

Trust is a critical component of strong brands. Trust in the product; trust in the provider of the product; and trust that when something goes wrong, the provider will fix it.

When it comes to trust and the future of healthcare, trust in data and data protection will be paramount for the brands looking to stand out from the crowd and create a competitive edge.

There’s a lot of room for growth.

The public perception of data security in healthcare is tepid at best. An Accenture study found that 41% of people “very much” trusted healthcare providers to safeguard their data, 39% “a little.” The results were even worse for tech companies, which received a 10% “very much” and 31% “a little” rating.

Perception aside, the public drive is there to finally create better data sharing. Moving between different EHR systems has long been challenging for patients and providers alike, with EHR companies highly disincentivized to offer collaboration. A study from the Pew Charitable Trusts found that “a clear majority of respondents—81%—said different providers should be able to share health data about patients they have in common.” In addition, “more than 2 in 3 want their various clinicians to exchange specific information in health records—such as advanced care plans or end-of-life preferences, images, and family medical histories—that federal data-sharing policies don’t currently require.”

And in a big win for personalization, the study found that “by a roughly 2-to-1 margin, respondents were comfortable with their health providers scanning patient fingerprints or assigning individuals a unique number or code to ensure that different EHR systems correctly match records for the same person, a long-standing challenge of data exchange.”

How can healthcare brands establish the trust that will set them apart in this competitive new landscape? First off, healthcare companies need to invest in the security technologies that will enable them to protect patient data and work with third-party companies to create a better patient experience without endangering data safety.

But it’s not enough to build the infrastructure anymore—successful brands need to convey a feeling of trust and credibility to these newly empowered customers.

Although the infrastructure needs to support a rebuttal to these challenges, public perception will be managed by good branding. The following sections outline the three considerations for building a trustworthy brand in the healthcare space.

When it comes to communicating care and trust, how a brand shows up can do some seriously heavy lifting. Think of tech companies, and how even a behemoth like Google feels fun and approachable. Tapping into the success that tech companies have had even as they accumulate an enormous amount of data can yield important lessons to healthcare companies hoping to do the same.

One of the biggest challenges for healthcare companies adopting an ecosystem model—either as the controller of the ecosystem or as a niche provider of excellent services within it—is how to communicate that care and trust across a wide array of partners.

Whenever you stitch together a series of collectives, it can be difficult to smooth out the edges into a seamless user experience. As companies look to adopt an ecosystem model to better serve their empowered customers and grab a larger share of the marketplace, many will likely struggle with the number of partners that might be working in tandem at any given time in said ecosystem. Partnering with best-of-breed services provides the most cutting-edge, innovative health-and-wellness experiences, but it also requires stitching together not only technologies but also cultures, delivery mechanisms and brand experience.

The overlap of the companies and their roles will need to be carefully orchestrated and defined to create consistency, not confusion. Are all companies equally visible? If not, what is the hierarchy? How do you communicate the value proposition of each, and how does this fit into the larger ecosystem?

Answering these questions, strategizing the approach, ensuring all members are on the same page, and building in the branding and marketing strategy to pull it all off will be the most difficult challenges healthcare companies face—but they will also set the stage for success when it comes to a coordinated brand that consumers can trust throughout their experience with multiple providers.

AI has the power to do much more than replace physical encounters with digital ones. And the customer journey through a healthcare platform should include surprise and delight at the seamlessness, personalization and speed.

This begins with a wide digital front door.

To attract and retain the newly empowered healthcare consumer, healthcare companies need to think more like a D2C company. This mindset starts with casting a wide net to attract new users on digital platforms. First, easy-to-find, relevant content about a company’s market differentiation should be quickly accessible and delivered to its target audiences at the right time. Advertising, search, website, mobile app—all require consistent branding and messaging that speaks to the consumer’s needs at the precise moment they need it.

Perhaps a patient searches for their symptoms and lands on a page that connects them with a chatbot. From there, they are directed to the right telehealth doctor, who can then prescribe them medication that is delivered to their door within a few hours.

All of these experiences increase the likelihood that a potential customer will not only continue their journey through purchase, but will also recommend and use a service in the future.

Throughout the transition to consumer trust building, it’s essential that employees and stakeholders be included, consulted and cared for to receive essential input from personnel on the ground and ensure that the brand carries a sense of ownership to the people who will be its face every day. In the case of healthcare providers, it could be the way for companies to establish trust with their consumers.

In fact, a recent study shows that providers may hold the key to helping companies establish the consumer trust they’re looking for. The Pew Charitable Trusts found that 76% of survey participants were comfortable with apps that were pre-approved by their providers, while 61% were comfortable with apps pre-approved by an independent certification board. This statistic signals that provider buy-in will be critical to mass adoption of new app technologies, and that there is a white space ready for a trusted, accredited institution to become the certifier of trustworthy apps.

But getting top talent to build that patient rapport will likely mean a war for talent. The COVID-19 pandemic has been devastating for hospital morale. More than one-third of nurses plan to quit their jobs in 2022, with 32% planning to retire or leave the field and 40% planning to get a job in nursing somewhere else (HealthLeaders). And burnout remains high across the board, with 52% of respondents in a recent study reporting “a great deal” of stress, and under 50% of providers reporting that they feel valued by their organization (American Medical Association).

Investing in healthcare providers and offering the support and technology they need to improve efficiencies and outcomes can greatly reduce this turnover. Another study shows that individuals who feel valued by their organization have an almost 60% reduction in experiencing burnout, as well as likelihood to leave their current position (American Medical Association). New York University Stern School marketing professor Scott Galloway noted in a recent piece that “physicians spend just 27% of their time helping patients—49% is spent dealing with electronic health records. That includes documentation, order entry, billing, and inbox management. In other words, you spend a decade going to school to get an M.D., only to become a bureaucrat” (“No Mercy / No Malice”). Investing in workflow efficiencies and AI technologies that can help providers spend less time on paperwork and more time with patients, and working with them to build a lived brand experience, will in turn result in better healthcare for consumers and continue to improve trust in healthcare brands.

We believe the healthcare industry is poised to change for the better. By empowering consumers with their health data and creating better, more cohesive health-and-wellness experiences, these changes may finally create a healthcare system that is built like the human body it treats: holistic and interconnected.

But the question of which companies will be there when it’s done will be determined by their willingness to adapt and invest in their brand during a period of expanded consumer choice—and to build a better future for the empowered healthcare consumer.

Contributors: Amyri Williams, Jeff Walker, Jerry Stiedaman, Mike Walsh. Editor: Maria Erdmann. Illustrator: Cody Fenske.