It is well-documented that the current degree and rate of change within the healthcare and diagnostics landscapes are unprecedented. Drivers of this change range widely from cost and reimbursement pressures downstream of government reforms, to the introduction of novel technologies and the expectations of an evolving user base.
Amid these industry shifts, IVD manufacturers need to account for the change as part of their future product development plans. While addressing these market conditions presents challenges, it also creates opportunities for new product approaches.
Transitioning to a patient-centric focus
Healthcare is one of the last major economic sectors that has remained mainly supply driven. This is largely a function of the traditional fee-for-service model (healthcare providers being reimbursed by third-party payers based on scheduled rates), but this is changing.
The patient as a consumer is also playing a role in this transition to a more demand-driven industry. Healthcare insurance costs continue to rise and individuals are paying a bigger proportion. Out-of-pocket payments in the U.S. are estimated to average $4,534 in 2017 for a typical family of four, according to the Milliman Medical Index (MMI). Coupled with greater internet access to general medical and health information, patients are better informed than ever before and are exercising informed choices of how their healthcare dollars are spent. People are increasingly becoming stakeholders in their own care as a means of managing costs.
A Kalorama Information market research study found that consumers are ordering their own medical tests from retail locations and mail order services at a surprising rate; the U.S. market for direct-to-consumer laboratory testing grew more than 750 percent over five years, from $15.3 million in 2010 to approximately $131 million in 2015.
Consumers are also tracking their own health for preventive reasons. The introduction of smartphones has ushered in mobile health, or mHealth, and facilitated widespread individual health monitoring. According to a 2015 study, approximately 165,000 mHealth apps were available and downloaded over 3 billion times that year alone. A major area for patient engagement that is expected to increase in the next five years is in chronic disease management of diabetes, heart failure and hypertension. Chronic disease management accounted for roughly 12 percent of mHealth apps in 2015.
What patients expect in terms of healthcare delivery is rapidly changing. Quality and direct, fast access to diagnostic data are becoming increasingly important as patients elect what, when and how they access healthcare services. In this climate, IVD manufacturers need to pay closer attention to the consumer experience, beyond the traditional patient experience. This holds true whether the testing takes place in the physician’s office or in the patient’s home. Diagnostic design and development increasingly need to address ease of sample collection, simplicity of instrument interaction and error prevention in result read-outs.
Here care, there care, everywhere care
The shift to a more demand-driven industry is also a factor in the decentralization of healthcare delivery beyond the traditional care settings of hospitals and doctor’s offices.
It is estimated that there are almost 2,000 retail clinics in the U.S., seeing more than six million patients annually.1 Some sources forecast as many as 2,800 to be in operation by the end of 2017.2 The retail pharmacy giants CVS and Walgreens operate the majority of current clinic locations, with athenahealth CEO Jonathan Bush noting in a 2016 industry presentation that more than 50 percent of the U.S. population live within 10 miles of a CVS Health MinuteClinic.
In addition to convenient locations, a draw for consumers has been the accessibility of care, especially during evenings or weekends when most physician offices are closed. With these factors driving rapid growth in the retail clinic sector, IVD platforms that fit in with pharmacy space and workflows stand to win a greater proportion of this business.
Urgent Care Clinics
Similarly, walk-in urgent care clinics are growing by offering speedy and convenient access to medical services as an alternative to overloaded hospital emergency rooms. There are approximately 7,100 urgent care centers in the U.S. providing care to nearly 160 million patients each year.3 Utilization is anticipated to increase at an annual rate of 5.8 percent4, with urgent care clinics gaining in popularity as a “fix” for long emergency room wait times and overbooked primary care physicians.
In comparison to retail clinics, urgent care clinics have the capacity and personnel to perform a broader range of diagnostic testing, such as X-rays and EKGs to complement “chemistry” tests. Additionally, urgent care clinics typically accommodate a more extensive range of these assays, with the ability to test a wider range of sample types including urine and venous blood. Given the associated workflow demands, simplicity of use and result turn-around-time are key performance parameters in this setting as well.
Demand for telehealth will continue to increase. According to the Department of Health Services’ Health Resources & Services Administration (HRSA), nearly one in five Americans live in rural communities, totaling approximately 57 million people. Telehealth presents an efficient and convenient option for overcoming the barriers of delivering medical care to these areas.
Coupled with home and self-monitoring diagnostic platforms, telehealth also offers significant benefits in providing care to the growing elderly population. It allows patients with limited mobility to connect with providers without having to leave their home or assisted living facility.
There are also telehealth user benefits for the healthcare system itself. Integration of telehealth helps reduce the number of physician office visits, repeat exams, hospital length of stay and readmissions with the use of remote, at-home diagnostic solutions. Not only does this remove costs from the system, it helps ease the workload on a currently stretched physician base. The current gap in primary care medicine is projected to increase; the American Association of Medical Colleges (AAMC) is forecasting that the shortage will reach 45,000 personnel by 2020.
Underscoring these benefits, Kaiser Permanente CEO Bernard J. Tyson reported that 52 percent of the health system’s total visits in 2015 were online. This announcement was a landmark in telehealth, with one of the nation’s largest integrated health systems handling 59 million of its 110 million total visits that year via online portals, virtual visits or health apps. It was also seen as a leading indicator of the popularity of telehealth among consumers.
Key to telehealth’s continued growth and improved outcomes are the connectivity and data security of associated devices and systems. For example, remote patient monitoring requires that diagnostic platforms are designed to both collect and securely electronically transmit medical data.
Future healthcare in general, and diagnostics in particular, will look very different as delivery models continue to evolve. The current trends of new technology introductions, “consumerization” and a focus on value-based care are here to stay. Traditional healthcare outlets will not go away, with the bulk of near-to-patient diagnostic use in the near term remaining within hospitals and clinics. However, longer term opportunities are being created for new Point of Care diagnostic technologies that address the growing range of medical care delivery settings.
Demand will increase for IVD offerings targeted at the user needs of retail and urgent care clinics, primary care physician offices, assisted living facilities and patients at home. This creates opportunities for IVD manufacturers to provide devices that accommodate the information needs, user skill sets and workflows within each of these settings. New approaches will be developed to address simplified sample collection and handling, built-in error prevention, rapid turn-around-times and secure LIMS data transmission.
The challenge for IVD manufacturers lies in designing new products and services aimed at truly understanding these contexts of use and the specific user needs. Integrating a human-centered experience design approach into the product development process from the start is one way to meet that challenge. The initial phase of this type of development approach consists of problem definition preceding and informing the product definition stage. Accurately identifying and understanding the real problems to be addressed before looking for solutions will result in the best product outcome.
Those diagnostic manufacturers who adapt most quickly to this new paradigm by offering product solutions aimed at truly understanding these contexts of use and the specific user needs will win in this increasingly demand-driven marketplace.
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