Although health executives are feeling optimistic, they see regulatory uncertainty as their greatest risk to growth in the year ahead. Within their own organizations, 25% of health executives indicate seeing disruption coming from new market entrants (17%) or technology (8%), while 16% see the primary disruptor as increasing competition from existing competitors.
The market disruption in health, powered by both traditional players and new entrants alike, manifests as novel, consumer-centric business models enabled by data. Innovative models are being created through, for example, vertical integration of payers and providers, the creation of employer-owned health hubs and the sharpened focus of technology giants on health care.
Two-thirds of health executives understand the transformational impact of digital
Roughly two-thirds of health respondents agree that their organizations have a clear vision for digital technology and acknowledge its transformational impact on business strategy, as well as the opportunities digital offers to reposition their portfolio and overall business. Further, 80% say their CEO has a clear vision of how acquisitions and divestments can help to accelerate digital transformation, while 38% report they will actively use M&A as a means to future-proof their business.
The drive to leverage digital technology to power their growth agendas has half of health organizations allocating 25% or more of their annual investment capital to digital capabilities. Of that total investment in digitalization, one-third are directing 25% or more to new growth opportunities — as opposed to more protective activities, such as optimizing the business through internal efficiencies.