The business of healthcare is currently seeing alliances between companies and industries never before thought possible. Some of these are designed to play defense in a competitive landscape dominated by industry giants, others are peers joining forces sparked by urgency or knowledge sharing, and others are taking advantage of a perfect storm—a healthcare sector in transformation. One thing they all have in common is innovation. Sometimes it’s breakthrough and sometimes disruptive, but often it takes the form of a better or faster way of doing what only two companies can do together.
Five important underlying business drivers are behind the recent flood of healthcare collaboration:
- Value Chain: The healthcare value chain has many gaps: disjointed care continuum, siloed stakeholders, health inequities, and affordability challenges. Going it alone isn’t easy.
- Size Advantage: Without a scalable business model and growing customer base it’s a long hard road to sustained profitability with issues including operating cost pressure, technology advancement, brand differentiation, and sales expansion.
- Market Access: Customer cross-over, particularly among healthcare’s many consumer journeys, is a natural collaboration accelerant, particularly between companies with complementary non-competing offerings.
- Financial Efficiency: Shared investment risk and rewards of expense reduction are attractive pieces of collaboration in which efficiencies can deliver cost savings and increased revenue.
- Consumer Demand: Convenience-minded, cancel culture consumers want frictionless experiences and a continuous value exchange from alliances that are nimble enough to deliver market-altering innovation.
The lure of two organizations’ combined resources to tackle a market challenge is compelling. Theoretically, these arrangements make sense. However, collaboration can prove difficult when it comes to reaching agreement on sharing financial risk, aligning customer objectives, coordinating operating practices, and communicating across stakeholders.
Examples of Healthcare Collaboration
Innovation is running rampant across the health ecosystem. Digital and virtual health are thriving along with a host of “shiny new objects” built around artificial intelligence, blockchain, genomics, and wearables. But innovation is also on display through collaboration, sometimes surprising pairings, and elsewhere natural outgrowths of a changing healthcare sector. Retail behemoths delivering care; providers morphing into payers; pharmacies selling potato chips, checkups, and insurance; tech bros moving into consumer health; and biopharma promoting digital therapeutics.
Here’s a medley of cross-stakeholder healthcare collaborations, what they’re doing, and what they’re trying to achieve:
- Walgreens and VillageMD: Rolling out physician-led, full suite primary care clinics co-located with retail pharmacies. Integrates pharmacists into care teams providing consumers convenient care options embedded in their community (80% of Americans live within five miles of a Walgreens).
- Eli Lilly and Welldoc: Integration of a proprietary diabetes management digital solution with connected insulin pen solutions. The intent is to organize personalized insulin dosing and glucose monitoring data to deliver actionable insights able to optimize diabetes care for improved outcomes.
- Best Buy and Kaiser: A senior market remote monitoring initiative using a technology called Lively Mobile Plus. Medicare members can obtain a two-way mobile communication device to connect with a care team to triage emergency vs. non-emergency situations and provide 24/7 assistance.
- J&J and Apple: A heart health program providing adults over age 65 the Heartline Study app on their iPhone. This joint “health outcomes improvement” effort seeks to reduce the risk of stroke with early detection of atrial fibrillation (AFib), a common form of stroke-inducing irregular heart rhythm.
- Ascension and Google: Under code name “Project Nightingale” a big data initiative to organize and manage medical records inside one of the nation’s largest health systems. This EHR search productivity tool pulls patient data enabling clinicians to quickly find relevant information as they design care plans.
- Pfizer and Myovant: A “David & Goliath” pairing takes a recently approved prostate cancer drug into a co-marketing arrangement with an industry powerhouse. It expedites the transition of a small clinical development biotech company to a commercial entity with its first FDA-approved medicine.
- Anthem and Sharecare: Integrating fragmented components of healthcare through a digital health engagement platform, which includes consumer access, provider delivery, and benefit administration. By leveraging access to 40 million insured members, the focus is on delivering organized and personalized health experiences.
- Lyft and Epic: By integrating a ride-sharing app into an electronic health record, providers can schedule transportation directly from a patient’s profile. This solution makes it easier for consumers to access care when they need it without delays or missed appointments due to transportation barriers.
- Microsoft and Nuance: A “knowledge automation” partnership linking one of the largest business combination platforms and cloud services with an innovative conversational AI voice-enabled technology solution to analyze clinician/patient encounters to improve telehealth workflow and patient healthcare experiences.
- Medtronic and Level Ex: Medical device and video game technology come together to educate and train physicians. A virtual reality experience is deployed as a vehicle to introduce, train, and accelerate anesthesiologist adoption of video laryngoscope for safer, more effective patient intubation.
- Fresenius and Humana: Working together, the second largest Medicare Advantage insurer and leading kidney care company offer more coordinated care for members with chronic kidney disease and end-stage renal disease. This patient-centered model of care focuses on early detection and reduced hospitalizations.
- AstraZeneca and AliveCor: A global biopharmaceutical company partnering with an FDA “breakthrough device” designee to develop new disease management solutions. Their opening collaboration uses an AI platform to screen patients for elevated levels of blood potassium without requiring blood to be drawn.
For healthcare marketers, innovation can’t just be an attention-grabbing headline or clever hype-cycle boost to a brand narrative. Innovation through cross-industry collaboration has to enhance customer experiences with tangible value exchange that resonates with new and existing customers linking them to actionable moments that matter.
Pharma’s COVID Collaboration
The most overused word of 2020 was “unprecedented.” And it’s certainly an appropriate term to describe recent collaboration within the life sciences sector. The COVID pandemic sparked a number of unexpected alliances. Early in the coronavirus crisis, the National Institutes of Health launched a sweeping public-private partnership with 16 pharmaceutical companies to coordinate and accelerate COVID treatments and vaccines.
As testing became the first line of defense for fighting the pandemic, Abbott led the way with its COVID testing solution, BinaxNOW. In less than a year, their efforts advanced in a partnership with eMed, a digital health platform, to bring the first at-home COVID test to the mass market, together working to deliver an estimated 120 million $25 test kits by Q2 2021. In another COVID-driven effort, Verily, Google’s healthcare sister company, and J&J’s Janssen joined forces to investigate coronavirus immune responses to identify early warning biomarkers to help guide healthcare providers’ future treatments.
In a highly publicized collaboration, Operation Warp Speed was established as a public-private partnership initiated by the U.S. government to facilitate and accelerate development, manufacturing, and distribution of COVID vaccines, therapeutics, and diagnostics. This effort was the catalyst for pharma-to-pharma partnerships, some pairing rivals and others matching niche players with titans. Out of it emerged many stories of collaboration: BioNTech and Pfizer, AstraZeneca and University of Oxford, Sanofi and Translate Bio, and Roche and Atea. And in a rare collaboration, two rival superpowers, Merck and Johnson & Johnson shook hands on a vaccine production partnership.
Throughout the last year, the pharmaceutical sector rose to the challenge and the world saw the availability of safe, widespread vaccinations bringing hope of a return to the next normal.
Rules of Engagement
Business partner collaboration must be purpose-driven and expectations well-defined to minimize surprises and maximize long-term value. Potential partners need to assess cross-functional compatibilities and remain hyper-focused around the vision and value of collaboration. Selecting a strategic partner requires an appraisal process no less intensive than an acquisition—an investor’s “due diligence” perspective. Collaborative alliances have to measure-up against five rules of engagement:
- Rationale: primary objective, business case, staying power
- Resources: who brings what, talent and skills, brand equity
- Risk: financial exposure, scalability, cultural alignment
- Return: up-front investments, pay-back targets, ROI hurdles
- Reward: performance KPIs, success metrics, reporting
Tight-knit collaboration among different parties with different enterprise missions and diverse business drivers is a delicate balance. Meeting shareholder expectations, balancing operational and financial goals, and servicing customers takes extraordinary discipline—and smart compromise!
Power of Teamwork
Success comes when parties can share common objectives, establish trust, and operate with transparency. For businesses willing to make the right investment, these arrangements can yield big rewards: open-up new markets, extend product or service offerings, accelerate innovation, and reap financial gain.
Partnerships can also be costly due to aspects such as lost development time, upfront financial investments, core business distractions, and financial disappointment. The future of collaboration will most certainly bring disappointments as healthcare pathways change and consumer demands shift. Even though failures are inevitable, as the saying goes “failure is not fatal, but failure not to try might be.” Not trying also brings to mind the question that looms in every health company’s Board room today: What’s next in the “Amazonification” of healthcare?
Health industry insiders are teaming-up at a much faster pace than in previous years. They are figuring out how to balance interests, align cultures, and create incentives to win together. For healthcare consumers it can mean empowerment to better manage their health and access to care when and where they want it—all at a better cost.