Opportunities and challenges in the healthcare sector
Modified on: Fri, 12 Feb, 2016 at 12:31 AM
The demand for healthcare increases
The global healthcare sector needs new innovations to meet long-term challenges such as aging population, lengthening of average life expectancy and rising incidence of chronic diseases. In addition, changes in lifestyle and eating habits increase the demand for preventive drugs, medical devices and new technologies. As healthcare consumers are becoming increasingly educated, demanding and interested in their health, the sector is becoming more consumer oriented and more focused on building relationships.
New digital solutions needed to increase efficiency and reduce costs
While many other sectors have already embraced digital technology, the healthcare sector is lagging behind. The increasing demand for healthcare forces the sector to become more efficient, which is a great opportunity for businesses offering solutions for increasing efficiency and reducing costs. The large players such as Big Pharma are still heavily focused on their traditional markets and consider digital solutions a niche market, limiting the competition for new businesses in this market.
Skilled workforce available for small companies
Big Pharma has cut down its workforce in Sweden and many other countries, increasing the availability of skilled workforce for smaller companies as well as business accelerators supporting the development of new businesses.
Many potential buyers of innovative companies
Big Pharma tend to buy companies with new innovations rather than developing new innovations in-house. That is, less competition for new innovative companies and plenty of potential buyers for investors if the company becomes successful.
Dominated by large established players
The market is dominated by large established players such as hospitals, regulators, insurance companies and drug makers. In order to succeed in this market, companies need to figure out how to work with the established players or how to go around them. Companies doing this successfully will have a solid competitive advantage though.
The healthcare sector is heavily regulated, although the regulatory burden varies between, for instance, pharma and digital health. Companies in this industry may need CE certifications and permits from medical product agencies to sell their services or products. For companies that embrace regulation and learn the processes they need to go through to meet regulatory requirements, regulations may as well become a competitive advantage.
Long established structures
Long established structures and resistance to change can make it more time consuming to launch new products and services in this sector. For instance, a device that prevents obesity may not be interesting for healthcare providers although it saves costs for the society, just because healthcare providers are rewarded for treating diseases rather than for preventing diseases. These structures are about to change though. Regulators as well as insurance companies are becoming increasingly interested in preventive care.
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