How data technology will fuel mergers and integration

Digital technologies and the massive volumes of all types of data fueled by the Internet of Things (IoT) are driving vertical integration within healthcare, according to a recent report from research consultancy Frost & Sullivan.

Boundaries between segments in the industry are blurring as organizations seek to expand market reach, drive efficiencies and capture opportunities emerging from technological advances, the report said.

Digital health technologies will help support new models of care delivery, expanded access to healthcare services, improved outcomes and efficiency, and greater value to all stakeholders. However, organizations vary greatly in their capacity to deliver such solutions, the firm noted.

“The imperative to add new IT capabilities and innovate is driving a wide array of stakeholders to converge and collaborate, creating a heated healthcare deal landscape for traditional mergers and acquisitions, joint ventures and new types of less-formal partnerships,” said Nancy Fabozzi, transformational health principal analyst at Frost & Sullivan.

“Flexible deal structures like joint ventures and partnerships, in particular, offer a faster, less-risky path to growth and innovation for healthcare companies,” Fabozzi said.

Digital health strategic partnerships and joint ventures in 2016 have concentrated on consumer engagement, wellness and analytics, the report said. The goal for stakeholders is to foster clinically integrated and decentralized care systems that serve empowered, technology-savvy consumers, who strongly value convenience and personalization.

“Many CEOs express a lack of confidence in their ability to successfully execute on the partnership strategy,” Fabozzi says. “Among the potential areas of concern are managing the disruption; designing solutions to cater to cross-care continuum use from hospital to home; and zeroing in on business models that not only scale solutions but also meet the needs of multiple client groups and global markets.”

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