Hands of pharmacist checking inventory using digital tablet

Why it’s time for a digital, direct-to-consumer health care revolution

Changing consumer expectations are creating opportunities for health care organizations to embrace e-commerce and evolve their business.

In brief

  • Digital commerce is the catalyst to meeting dynamic consumer expectations – in turn, creating a health care revolution.
  • Direct-to-consumer (DTC) digitization offers a software-as-a-service (SaaS) experience that integrates with existing systems to maintain regulatory compliance.
  • The global health care e-commerce market has grown 18.5% CAGR to US$310b in 2022, and is expected to reach US$614b by 2026 at 18.7% CAGR.

Consumers are seeking better, simpler buying experiences across categories – and health care is no exception. These changing expectations are creating massive opportunities for health care organizations to embrace digital commerce and connect with patients in ways that bolster consumer loyalty and bottom-line results. Maxing out that potential requires the entire industry to rethink traditional paradigms while maintaining above-and-beyond commitment to regulatory compliance. You can’t have one without the other. 

Direct-to-consumer digitization is critical in health care today

Traditional health care (spanning the various products and services required to prevent or treat illness and injury) has always been complex. Practitioners are in ever-growing demand. Systems are under increasing strain. All the while, patients have begun looking for better health care experiences; ones more in line with the seamless and easy direct-to-consumer (DTC) digital experiences they can now access in just about any other aspect of their lives. Essentially, the market demands that health care move at the same pace as any consumer industry. Products, services, regulations and above all patient needs are shifting continuously. And the days of “build it yourself” solutions are over. To keep pace, health care providers must offer up solutions that are truly best in class. What does that look like? Low code or no code, software as a service (SaaS) experiences. These solutions must be truly easy to use and configure and integrate into existing platforms and systems. The market demands that health care move at the same pace as any other consumer industry.  

By the numbers, the global health care e-commerce market grew from US$261 billion in 2021 to $310 billion in 2022 at a compound annual growth rate (CAGR) of 18.5%. That trend is expected to continue. Analysts suggest health care e-commerce will balloon to US$614 billion in 2026 at a CAGR of 18.7%. What’s driving this surge? Health care consumers are increasingly looking for: 

  • Choice. Consumers have easy access to a wide range of health care products and services with multiple points of access including websites, mobile apps and cloud-based channels. Like any other product or service, they want options for their health care, and they are more conscientious of costs and associated benefits.
  • Trust. Strong, credible and trustworthy user experiences are table stakes for consumers engaged in health care e-commerce. Across industries, digital trust (via ey.com Canada) can now set a brand a part, engaging audiences and building loyalty.
  • Virtual. The COVID-19 pandemic-driven need for more digital and low-touch health care services — combined with the physical and emotional effects and tolls of COVID-19-induced isolation — have reshaped consumer expectations in lasting ways.
  • Efficiency. The same convenience consumers have come to expect from shopping, travel and financial management now extends to health. Patients can access health care services from the comfort of their own homes and have medications shipped to their doorstep, avoiding the hassle and frustrations of waiting rooms and the in-person pharmacy. The digital-first nature of this approach increases efficiency; consumers value this.
  • Affordability. In 2023, 94% of global consumers are now worried about the rise of living costs as they continue to navigate inflation. At the same time, global health care benefit costs have been increasing and are expected to hit their highest levels in roughly 15 years. Worldwide, insurers expect a 10% increase in 2023, after seeing similar increases in 2022 and 2021. Consumers feel the impact of these increases and are proactively evaluating the health care system to understand more about these shifts.

How EY can help

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Addressing these drivers and embracing digital isn’t easy in a field as highly regulated as health care. New markets are opening up. New technologies are taking shape. But digitizing the end-to-end consumer health care journey must be done in compliance with a host of regulations that are not only different across jurisdictions, but they’re also changing in real time. While these drivers represent meaningful opportunities to disrupt the way health care has always been and start delivering improved customer experiences through online health care ecosystems, this modernization must occur through platforms and alliances that account for those regulatory nuances every step of the way and ability to serve more patients in the same amount of time. Extrapolate that finding across the entire value chain — with key compliance checks along the way — and a multitude of other benefits emerge.

 

Embracing health care e-commerce helps patients and providers alike

 

Many aspects of health care are already moving online: appointment scheduling, telemedicine, prescription refills, health care product purchases are chief among them. Even so, the industry continues to lag behind others in its digitization. That’s driven largely by the complexity of processes among health care intermediaries, namely the regulatory environment that the health care industry operates within. Unlike other service offerings (think ride share or food delivery), moving health care online entails highly specific regulatory and other nuances to consider. That includes:

  • Addressing the quality and safety of care
  • Protecting patient privacy
  • Complying with regulatory requirements
  • Managing the integration of technology
  • Addressing existing legacy core systems

Accounting for these critical factors through a digital approach that addresses evolving consumer needs effectively creates opportunities for health care organizations and companies, too.

For instance, consumers desire more efficient health care services. Delivering on that promise through virtual offerings doesn’t only help the patient. It simultaneously boosts the practitioner’s ability to serve more patients in the same amount of time. Extrapolate that finding across the entire value chain — with key compliance checks along the way — and a multitude of other benefits emerge.

For example, offering products and services directly to consumers meets their need for better pricing. Doing so also helps companies reduce distribution costs and inefficiencies, to improve profit margins overall.

What’s more, embracing digital DTC models empowers consumers with easily accessible information, so they can take a more proactive role in managing their own health. At the same time, employing health care e-commerce helps providers and consumers to interact, sharing data that can ultimately lead to a more personalized experience. Tailored product, service or information offerings. Digital tracking or visualization of symptoms. Condition-specific recommendations. All of this becomes possible when health care is backed by the right digital platforms.

 

Streamlined e-commerce platforms (such as Shopify) can seamlessly connect the consumer health care journey — improving patient outcomes and health care provider experiences — all while baking regulatory compliance right into the operating model itself.

 

How can health care modernize to seize these opportunities now?

 

Regulations are evolving quickly. Health care e-commerce must be capable of moving just as fast, operating and selling products in a compliant manner to reduce risk. Accelerating DTC models in health care ecosystems requires trusted digital platforms that are technically sound, and capable of seamlessly integrating compliance, data analytics and tax considerations.

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    Summary

    Changing customer expectations are creating massive opportunities for health care organizations to embrace digitization and connect with patients in ways that bolster consumer loyalty and bottom-line results. 

    EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.